occupational pension

Here is a mistake many working Nigerians make without even noticing. They see the pension deduction on their payslip, sigh at the smaller take home pay, and mentally write it off as gone, another government tax dressed up in fancy clothes. So they never check the balance, never confirm the employer is remitting, never ask questions until retirement is close and they suddenly need to know what they actually have.

An occupational pension is not a tax. It is your money, sitting in an account with your name on it, growing while you work. In Nigeria, this is the Contributory Pension Scheme under the Pension Reform Act. You typically contribute 8 percent of your salary, your employer adds at least 10 percent, and it all lands in a Retirement Savings Account managed by a Pension Fund Administrator you get to choose.

Take a civil servant in Abuja earning ₦300,000 a month. Roughly ₦24,000 comes from her salary and ₦30,000 from her employer, so ₦54,000 goes into her RSA every month, untouched by her hands, calmly compounding for thirty years. That is the whole point. It is retirement money that builds itself before she is tempted to spend it.

In the United Kingdom, the equivalent is workplace pension auto enrolment, where employees are automatically signed up and both worker and employer contribute a percentage of qualifying earnings, unless the employee actively opts out.

For Nigerians abroad, this matters if you ever worked formally back home before relocating. That old RSA did not vanish. It is still sitting with your PFA, and you can still access your statement, update your details, and eventually access the funds under the rules that apply to you.