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Business News of Wednesday, 14 October 2020

Source: The Nation

Five things to know as an employee under CPS

Who is covered by the Contributory Pension Scheme (CPS)?

The CPS covers employees in the public service of the Federation, Federal Capital Territory, states, local governments and private sector organisations with three or more employees.

Can employees who are not covered participate in the CPS?

Yes, employees of organisations with fewer than three employees as well as self-employed persons can voluntarily participate in the CPS under the Micro Pension Plan (MPP).

Who is exempted from the CPS?

Judicial officers, members of the Armed Forces, the Intelligence and Secret Services of the Federation; retirees under any pension scheme existing before June 30, 2004; and employees who had three or less years to retire as at June 30, 2004.

Can foreigners employed in Nigeria participate in the CPS?

Foreigners working in Nigeria are not allowed by law to participate in the CPS. However, such  foreigners may participate in the scheme.

Can Nigerians working abroad participate in the CPS?

Nigerians working abroad cannot to participate in the CPS. However, they may do so voluntarily.

What happens to the RSA of a person who resigns and takes up appointment outside the country?

Such a person is entitled to make arrangements with the new employer to continue remitting his pension contributions into his/her RSA in Nigeria.

However, if the person chooses to discontinue with the scheme in Nigeria or the new employer has an entirely different pension arrangement, he/she may access his RSA upon retirement or attaining the age of 50 years, whichever is earlier.

Can a retiree under the DB Scheme participate in the CPS?

A retiree under the DB Scheme can voluntarily participate in the CPS if he/she secures a new employment.

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