Kemi Oluwashina, Managing Director of Premium Pension, passionately shared her insights on the transformative impact of the Pension Reform Act 2014. She highlighted the growth of the pension industry, which has reached N20.48tn in pension funds and 10,381,019 Retirement Savings Accounts.
Oluwashina emphasized the importance of voluntary pension contributions, saying, “Beyond the mandatory 18% contribution, employees should consider making additional voluntary contributions to boost their retirement savings.” She noted that the Federal Government’s minimum contribution requirement is just a starting point, and individuals should strive for more.
The Contributory Pension Scheme allows employees and employers to contribute to an employee’s pension fund. While the mandatory contribution is 18%, voluntary contributions can be made above this amount. FCMB Pensions explains that voluntary contributions are optional and can be made by informing your employer to deduct a specified amount from your monthly salary.
PenCom’s guidelines outline the eligibility criteria and withdrawal rules for voluntary contributions. Stanbic IBTC Pension Managers provide a breakdown of the withdrawal process, stating that 50% of voluntary contributions can be withdrawn every two years, subject to taxes on income earned.
ARM Pensions highlights the flexibility of voluntary contributions, allowing individuals to decide the amount and frequency of contributions. This feature sets voluntary contributions apart from regular pension contributions.
In conclusion, voluntary pension contributions offer a powerful way to enhance your retirement savings. If you desire to have more than half of your last salary in your golden years, consider making voluntary contributions.
