Calculate your pension contributions and project your RSA fund at retirement under Nigeria's Contributory Pension Scheme (CPS). See monthly contributions and estimated retirement income.
How Your Pension Grows Under CPS
Your RSA balance grows in two ways: contributions from you and your employer each month, and investment returns earned by your PFA on the accumulated funds.
The total monthly contribution is 18% of your emolument (basic + housing + transport) — 8% employee + 10% employer. If you earn ₦350,000/month total emolument, ₦63,000 goes into your RSA every month, with ₦28,000 from you and ₦35,000 from your employer.
Starting early matters enormously. Starting contributions at 25 vs 35 can result in a retirement fund 2-3x larger, thanks to compound growth over extra years.
For retirement income planning, a common approach is withdrawing 4–5% of your RSA per year (programmed withdrawal). At a ₦50M RSA, this is ₦2–2.5M per year or ₦167k–208k per month.
Frequently Asked Questions
How does the Nigeria Contributory Pension Scheme (CPS) work?
The CPS was established by the Pension Reform Act 2014. Both employee and employer make contributions to an individual Retirement Savings Account (RSA) managed by a licensed Pension Fund Administrator (PFA). Employee contributes 8% and employer contributes 10% of the monthly emolument (basic + housing + transport). The funds are invested by the PFA and grow over time.
What is the minimum pension contribution in Nigeria?
The mandatory minimum is 18% of monthly emolument: 8% from employee and 10% from employer. An employer may choose to bear the full 18% or more on behalf of the employee. Self-employed individuals can make voluntary contributions to an RSA. Micro-pension schemes allow informal sector workers to contribute as little as ₦500 per period.
How much pension will I receive at retirement?
Your monthly pension is determined by programmed withdrawal or annuity purchase from your RSA balance. A common rule of thumb is that your retirement fund should provide income for 20+ years. If you retire with ₦50 million and expect to live 20 years, you could withdraw roughly ₦2.5 million per year (₦208,000/month), plus growth on the remaining balance.
Who manages pension funds in Nigeria?
Pension Fund Administrators (PFAs) licensed by the National Pension Commission (PenCom) manage RSAs. Major PFAs include Stanbic IBTC Pension, ARM Pension, AIICO Pension, Leadway Pensure, and Trustfund Pension. The funds are held in custody by licensed Pension Fund Custodians (PFCs) separately from the PFA's own assets.
Can I access my pension before retirement?
You can access 25% of your RSA balance if you are 50 years old or have been unemployed for 4 months or more. Full access is at retirement (typically 60 years or after 35 years of service in the public sector). There are also provisions for accessing a portion for housing under the RSA Mortgage scheme through FMBN.