Returns shown are net of fees. Data sourced from PenCom Quarterly Pension Industry Report Q4 2025. Updated quarterly. Click column headers to sort.
| PFA | 1-Year Return | 3-Year Return | 5-Year Return ▼ | AUM (₦B) | RSA Holders | Remittance Rate |
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AVCs reduce your taxable income AND grow your RSA faster. Most Nigerians miss this tax-efficient savings opportunity. Under PITA, voluntary contributions above your mandatory 8% are deductible up to 1/3 of gross income.
Total gross — used for PAYE calculation
Basic + Housing + Transport only
Used to calculate earlier retirement date
Minimum ₦2,000/month
At retirement, PenCom allows a 25% tax-free lump sum. Should you take it? This depends on your health, expenses, and life expectancy. This tool shows you the break-even point.
Annual rate at which an insurer converts your RSA to monthly income
How much you need to live on each month in retirement
Some older employment contracts offer gratuity instead of (or alongside) pension. Which is worth more? Enter your gratuity formula to compare.
Since 2004, all companies with 15 or more employees must operate the Contributory Pension Scheme. Gratuity can only supplement CPS — it cannot replace it. Any employer operating gratuity-only for eligible staff may be non-compliant.
E.g. 2 = "2% of final annual salary per year served"
If you pass away, your family receives your full RSA balance plus mandatory group life insurance. Here's exactly how much that is.
Group life = 3× this figure (PRA 2014 s.9)
Employers must remit contributions by the 7th of the following month. Failure incurs a 2% penalty per month on unremitted amounts. Check what should be in your RSA — then verify against your PFA statement.
Nigeria's pension system was transformed by the Pension Reform Act 2004 (updated comprehensively in 2014), which replaced the chronically underfunded Defined Benefits Scheme with the Contributory Pension Scheme (CPS). Under CPS, both employer and employee make mandatory monthly contributions into individual Retirement Savings Accounts (RSAs) managed by licensed Pension Fund Administrators (PFAs) regulated by the National Pension Commission (PenCom).
The pensionable emoluments base — basic salary, housing allowance, and transport allowance — is what contributions are calculated on. Other allowances such as utility or meal are typically excluded. This distinction matters: a worker earning NGN 700,000 gross but with NGN 200,000 in non-pensionable allowances has contributions calculated on only NGN 500,000.
PFA selection is one of the most important and most-ignored retirement decisions. The difference between the best and worst PFA 5-year return is often 3–4 percentage points. On a NGN 5M RSA over 20 years, that difference compounds into tens of millions of naira — a gap this tool makes visible through the PFA Impact Calculator.
Additional Voluntary Contributions (AVCs) are a powerful but underused tool. Because AVCs are deductible from taxable income under PITA, the actual net cost to an employee in the 21% or 24% tax band is significantly less than the nominal AVC amount. NGN 10,000 per month in AVC may cost as little as NGN 7,600 after PAYE savings — while building a substantially larger retirement fund.
Pension contributions are based on "monthly emoluments" = basic salary + housing allowance + transport allowance. Other allowances (meal, utility, entertainment, medical) are not included unless an employer chooses to add them. This is different from "gross salary" for PAYE purposes.
Yes — once per 12-month period under the PenCom RSA Transfer Framework. Initiate the request with your new PFA. Transfers complete within 5 working days. Check PFA 5-year net-of-fee returns before switching — that metric predicts long-term retirement wealth better than 1-year performance.
Yes. Mandatory employee contributions (8% minimum) are fully deductible from taxable income. Voluntary contributions (AVCs) above 8% are also deductible up to one-third of gross income under PITA. AVC tax savings can make voluntary contributions significantly cheaper than their face value.
PenCom launched the micro-pension scheme in 2019 for self-employed and informal sector workers — traders, artisans, Uber drivers, freelancers, farmers. Minimum contribution is NGN 500/week or NGN 2,000/month. No employer is required. Uniquely, 40% of accumulated contributions are accessible at any time for emergencies, while 60% is locked for retirement.
Your full RSA balance passes to your named beneficiaries (next of kin). Additionally, your employer must provide group life insurance equivalent to 3× your annual basic salary under PRA 2014 s.9(3). This means a worker with NGN 4.2M annual basic and NGN 8M RSA would leave their family NGN 20.6M in total benefits. Always name beneficiaries on your PFA portal — without named beneficiaries, distribution requires Letters of Administration, which can take months or years.
The 25% lump sum is tax-free and immediate. The trade-off is lower monthly income for the rest of your life. The break-even point — when cumulative higher monthly payments from the no-lump-sum option exceed the lump sum amount — is typically 14–18 years after retirement at a 6% annuity rate. If you live past that age, the no-lump-sum option delivers more total wealth. Use the "At Retirement" tab to calculate your personal break-even age.