Social Security
Pension Rights
Law provides for both full pension as well as early pension. The qualifying condition for old age pension is reaching the age of 50 years with at least 20 years of contributions. Employees in some cases retire early on medical grounds or in accordance with the terms and conditions of the employment. Pensions are paid under the social insurance system with both the employer (10% of the gross salary) and worker (8% of the gross salary) paying their contributions.
The amount of old-age pension is based on the insured's account balance and the expected life span. At retirement, the insured may choose between an annuity or monthly or quarterly payments calculated based on life expectancy. The insured person can withdraw a partial lump sum from the individual account if the remaining balance is sufficient to purchase an annuity or to fund periodic payments. The pension is then paid either monthly or quarterly.
In case of early pension, insured persons who become unemployed before age 50 may receive up to 25% of the account balance as a lump sum after a four-month waiting period.
Minimum guaranteed pension is set by the government on the recommendation of the National Pension Commission, however, the amount is yet to be determined.
Sources: ISSA Country Profile for Nigeria, ; Pension Reform Act, 2014
Dependents' / Survivors' Benefit
The surviving family members are entitled to a survivors' pension if the deceased person received or was entitled to receive an old age or disability pension. The survivor pension is not payable aboard.
The eligible survivors are widow/widower, children or any authorized persons named by the deceased. In case, there is no surviving spouse or child, the pension is paid to the next-of-kin or the administrator of the deceased person’s estate.
Amount of survivor’s pension is at least three times the deceased person’s gross salary and is paid to the deceased worker’s individual account by a life insurance company contracted by the employer. The account balance is distributed to the worker’s eligible survivor(s).
Sources: ISSA Country Profile for Nigeria; Pension Reform Act, 2014
Invalidity Benefit
Worker’s entitlement to the invalidity benefit must be assessed with an incapacity for work. The invalidity benefit is not payable aboard and the worker's disability may be reassessed after every two years by the medical board or a qualified doctor at the request of the insured person.
Invalidity benefit is based on the insured's contributions plus accrued interest. The insured person may purchase an annuity or receive monthly or quarterly payments that are calculated on the basis of life expectancy. The insured person can withdraw a partial lump sum from the individual account if the remaining balance is sufficient to purchase an annuity or to fund periodic payments of at least 50% of insured's annual earnings at the time the disability began.
Sources: ISSA Country Profile for Nigeria; Pension Reform Act, 2014
Regulations on Social Security
- Pension Reform Act, 2014
