The Senate has passed a new Pension Reform Bill which seeks to replace the existing Pension Reform Act 2004. The Bill is yet to cross a further legislative hurdle and the Presidential assent required to become law. When this is done, several changes will be introduced such as the imposition of a 10-year jail term for persons found guilty of misappropriating pension funds, the creation of a Pension Protection Fund, inclusion of more private sector employers, increase in the minimum contribution into the Scheme by both employers and employees, and the imposition of fines and penalties on Pension Fund Administrators (PFA) for failing to meet their obligations to pension contributors and for failing to comply with the provisions of the Act.
Employers may need to restructure their staff compensation to minimize the impact of increase in staff cost while maintaining staff take home pay at current levels.
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