The second tier occupational pension and personal pension schemes are defined contribution schemes.
The mandatory second tier occupational pension and voluntary third tier provident fund and personal pension schemes will be privately-managed by approved trustees licenced by the Authority with the assistance of pension fund managers and custodians registered by the Authority.
The pension fund managers and custodians will first be licensed by the Securities & Exchange Commission.
* Fully funded
* Defined Contribution
* Privately Managed
* Operated under trust by approved trustees
* Preservation and Portability
– Full and immediate vesting
– Accrued benefits to be preserved until retirement age; earlier benefits allowed under certain prescribed conditions
– Transfer of accrued benefits to another account during change of employment.
* Employee is paid a lump sum money on termination of Service, death or retirement.
* Withdrawal of Accrued Benefits (section 101 of Pensions Act)
* Benefits preserved until the retirement age ( entire accrued benefit paid) Could be withdrawn under prescribed reason:
– Early retirement (age 50 and unemployed or self-employed)
– Medical-total or permanent disability
* Assignment of Benefit : use of lump sum benefit as collateral to secure mortgage for primary residence (section 103 of Act)
– Tax Relief on Contributions – 5.0%