Pension Contribution & RSA Growth Calculator
Models mandatory 8% employee and 10% employer contributions under the Pension Reform Act (PRA 2014) on pensionable emoluments, with long-term compound growth projections.
Computational Framework & Statutory Formulas
Pensionable Emoluments = Basic Salary + Housing Allowance + Transport Allowance
Employee (8%) + Employer (10%) = 18% Total Monthly Contribution to PFA
Future Value = PMT × [((1 + r/12)^(12×n) - 1) / (r/12)] + Initial Balance × (1 + r/12)^(12×n)
Nigerian Economic & Statutory Context
The National Pension Commission (PenCom) regulates the Nigerian Contributory Pension Scheme (CPS). Employers with 15 or more employees must participate. Contributions must be remitted to the employee Pension Fund Custodian (PFC) within 7 business days following payment of salaries, failure of which incurs a statutory penalty of not less than 2% of the unpaid amount per month.
Frequently Asked Questions (FAQ)
What constitutes pensionable emoluments in Nigeria?
Under Section 4(5) of the Pension Reform Act 2014, pensionable emoluments mean the monthly sum of Basic Salary, Housing Allowance, and Transport Allowance. Other ad-hoc allowances and bonuses are typically excluded unless specified by the employer.
Can an employer pay the entire 18% pension contribution on behalf of the employee?
Yes. Under Section 4(2) of the PRA 2014, an employer may elect to bear the entire pension burden on behalf of the employee, provided the total contribution is not less than 20% of pensionable emoluments.
What is the penalty for late pension remittance in Nigeria?
Under Section 11(7) of PRA 2014, an employer who fails to remit pension deductions within 7 business days of salary payment is liable to a statutory penalty of not less than 2% of the unpaid amount for each month or part of a month the default continues.