Pension Reform Act: The good, the bad and the ugly

According to the federal government of Nigeria, the value of pension assets in Nigeria is about 4.21 trillion Naira at the end of March 2014. Globally the figure is put at over 70 trillion dollars as at the end of 2013. On one hand, what we have achieved in Nigeria is worthy of celebration given that we were in a deficit position of over 2 trillion Naira before the 2004 pension reform. On the other hand, the revelation that there are only about 2.4 million contributors to the pension scheme leaves a lot to be desired. Based on the information by the Bureau of Statistics, there are about 60 million Nigerians of working age.

Effectively, this means less than 5% of Nigerians are covered leaving over 95% exposed to social insecurity in their old age While the new act is generally a step in the right direction, some of the changes introduced appear not to have been well thought through and some of the changes appear to have been made at the last minute thereby creating some gaps, ambiguities and inconsistencies within the law. The salient changes are outlined in this article and categorised broadly under "the Good", "the Bad" and "the Ugly"..