Feature/OPED
Retirement Savings Accounts and Wills: The Meeting Point
By Gbolahan Oluyemi
Due to the increasing problems pertaining to pension payment, the National Assembly enacted the Pension Reform Act 2004 during the Chief Olusegun Obasanjo Administration. However, the legislation did not effectively achieve the objectives after 10 years of operation.
Consequently, the National Assembly passed the Pension Reform Act 2014 which was signed into law by the former President – Dr Goodluck Jonathan in July 2014.
The Pension Reforms Act 2014 repealed the Pension Reform Act 2004. While the objectives of the 2004 and 2014 Pension Reform Acts are the same, the 2014 Act seeks to achieve the smooth operations of the contributory pension scheme.
The 2014 Act, which is the extant law, mandates all employees covered by the scheme to create a Retirement Savings Account (RSA). The RSA is funded by a monthly contribution of 8% of an employee’s emoluments by the employee and a monthly contribution of 10% of an employee’s emoluments by the employer. However, Section 4 (3) of the Act permits an employee to make an additional voluntary contribution to the RSA.
Given the previous problems surrounding access to pension funds, the law provides the mode for accessing contributed pension funds. Generally, the contributed fund is accessible upon retirement or attainment of 50 years of age in the manner stated in Section 7 of the Pension Reform Act.
Persons unemployed for a period of not less than four months are allowed by Section 15(5) of the Pension Reform Act to access 25% of the funds in their retirement savings account.
By Section 10 of the Pension Reforms Act, the retirement savings funds are tax exempted. The exemption makes voluntary contributions by employees a viable estate planning tool for tax mitigation.
Indisputably, the introduction of the contributory pension scheme has brought sanity to the pension payment system and relief to pensioners.
However, there is a meeting point between accessing the RSA funds and Will writing. This is evident in Section 8 (2) of the Pension Reforms Act which states the requirement for accessing the pension of a deceased person.
Where employees or retirees dies, the law requires a valid Will admitted to Probate or Letters of Administration issued by a High Court.
Upon receipt of either of a Will admitted to Probate or Letters of Administration, the Pension Fund Administrator obtains the approval of the Pension Commission. Then, the Pension Fund Administrator releases the funds in the Retirement Savings Account to the beneficiaries in the Will or the Administrators appointed by the court.
While there are two options, the option of a Will is preferable considering the realities surrounding intestacy (i.e. dying without a Will).
A letter of administration is the legal authority granted by the Probate Division of the High Court of a State to a person called the Administrator/Administratrix to administer the estate or property of a person who died without leaving a Will. The process of getting this document is time-consuming and bureaucratic. I ordinarily do not advise people to allow their loved ones to fall into this category for the following reasons:
Letters of Administration are issued to persons who apply in line with the Administration of Estates Law of the state. Most times, the grant does not reflect the deceased’s wishes on the administration of the estate.
The Administrators share the estate by the personal law binding the deceased and not in line with the deceased’s wishes or the peculiar needs of his dependents. Due to ineffective monitoring, some Administrators emerge as emperors, thereby administering the estate to their benefit or as they please.
In a polygamous setting or a complex situation, the situation can get messy as such that some dependents may be frustrated out of the inheritance and denied benefiting from their deceased benefactor’s hard-earned assets.
Given the inadequate data management system, the procedure may be open to fraud or misrepresentation of facts in obtaining the Letters of Administration.
Since the deceased did not expressly dictate his/her wishes, socio-cultural limitations may be imported into the estate administration, thereby depriving some culturally disadvantaged beneficiaries such as children outside wedlock, girl-child etc.
In complex situations, beneficiaries may have to resort to litigation to get what is due to them from the Administrators.
Dying without a Will is synonymous with living without a plan.
However, when someone dies leaving a valid Will, the person is said to have died testate. His assets, including the funds in his retirement savings account, are distributed as stated in his Will. Another benefit of leaving a valid Will is that it resolves inheritance issues in complex and polygamous situations.
A Will allows you to decide who will manage your asset. Additionally, a Will can be used to announce lifetime secrets, appoint a guardian for underage children, pass on family values, protect culturally disadvantaged beneficiaries and avoid litigation over one’s assets.
Except where the validity of a Will is contested, the process of obtaining Probate is less complicated compared to the process of obtaining Letters of Administration.
In practice, after you write a Will, a sealed copy is usually lodged at the Probate Registry of the High Court of the State for records. Upon the death, the Will is unsealed and read to the family of the deceased. This process guarantees that the testator’s wishes are not altered.
Most times, people don’t write their Wills because they believe that a Will is a document to be made in anticipation of death. This reasoning is myopic because no one knows when his/her last day.
It is safer to plan for the far future than to run into the future unplanned. I usually advise that anyone with dependents (i.e. children, spouse) and assets (i.e. Retirement Savings Account, Land, Bank Accounts etc.) should have a valid Will.
Writing a Will is not only ideal, it saves your family and guarantees that your hard-earned assets do not fall into wrong hands or are subject to waste.
I am available to provide more information and answer your questions on your retirement savings account, Wills and estate planning. Please feel free to ask me questions via [email protected] or [email protected].
By Luke Kyohere
The global payments landscape is undergoing a rapid transformation. New technologies coupled with the rising demand for seamless, secure, and efficient transactions has spurred on an exciting new era of innovation and growth. With 2025 fast approaching, here are important trends that will shape the future of payments:
1. The rise of real-time payments
Until recently, real-time payments have been used in Africa for cross-border mobile money payments, but less so for traditional payments. We are seeing companies like Mastercard investing in this area, as well as central banks in Africa putting focus on this.
2. Cashless payments will increase
In 2025, we will see the continued acceleration of cashless payments across Africa. B2B payments in particular will also increase. Digital payments began between individuals but are now becoming commonplace for larger corporate transactions.
3. Digital currency will hit mainstream
In the cryptocurrency space, we will see an increase in the use of stablecoins like United States Digital Currency (USDC) and Tether (USDT) which are linked to US dollars. These will come to replace traditional cryptocurrencies as their price point is more stable. This year, many countries will begin preparing for Central Bank Digital Currencies (CBDCs), government-backed digital currencies which use blockchain.
The increased uptake of digital currencies reflects the maturity of distributed ledger technology and improved API availability.
4. Increased government oversight
As adoption of digital currencies will increase, governments will also put more focus into monitoring these flows. In particular, this will centre on companies and banks rather than individuals. The goal of this will be to control and occasionally curb runaway foreign exchange (FX) rates.
5. Business leaders buy into AI technology
In 2025, we will see many business leaders buying into AI through respected providers relying on well-researched platforms and huge data sets. Most companies don’t have the budget to invest in their own research and development in AI, so many are now opting to ‘buy’ into the technology rather than ‘build’ it themselves. Moreover, many businesses are concerned about the risks associated with data ownership and accuracy so buying software is another way to avoid this risk.
6. Continued AI Adoption in Payments
In payments, the proliferation of AI will continue to improve user experience and increase security. To detect fraud, AI is used to track patterns and payment flows in real-time. If unusual activity is detected, the technology can be used to flag or even block payments which may be fraudulent.
When it comes to user experience, we will also see AI being used to improve the interface design of payment platforms. The technology will also increasingly be used for translation for international payment platforms.
7. Rise of Super Apps
To get more from their platforms, mobile network operators are building comprehensive service platforms, integrating multiple payment experiences into a single app. This reflects the shift of many users moving from text-based services to mobile apps. Rather than offering a single service, super apps are packing many other services into a single app. For example, apps which may have previously been used primarily for lending, now have options for saving and paying bills.
8. Business strategy shift
Recent major technological changes will force business leaders to focus on much shorter prediction and reaction cycles. Because the rate of change has been unprecedented in the past year, this will force decision-makers to adapt quickly, be decisive and nimble.
As the payments space evolves, businesses, banks, and governments must continually embrace innovation, collaboration, and prioritise customer needs. These efforts build a more inclusive, secure, and efficient payment system that supports local to global economic growth – enabling true financial inclusion across borders.
Luke Kyohere is the Group Chief Product and Innovation Officer at Onafriq
In a heartfelt statement released today, the Conference of Nigeria Political Parties (CNPP) has extended its warmest congratulations to Ghana’s President-Elect, emphasizing the importance of learning from Ghana’s recent electoral success as Nigeria gears up for its 2027 general elections.
In a statement signed by its Deputy National Publicity Secretary, Comrade James Ezema, the CNPP highlighted the need for Nigeria to reclaim its status as a leader in democratic governance in Africa.
“The recent victory of Ghana’s President-Elect is a testament to the maturity and resilience of Ghana’s democracy,” the CNPP stated. “As we celebrate this achievement, we must reflect on the lessons that Nigeria can learn from our West African neighbour.”
The CNPP’s message underscored the significance of free, fair, and credible elections, a standard that Ghana has set and one that Nigeria has previously achieved under former President Goodluck Jonathan in 2015. “It is high time for Nigeria to reclaim its position as a beacon of democracy in Africa,” the CNPP asserted, calling for a renewed commitment to the electoral process.
Central to CNPP’s message is the insistence that “the will of the people must be supreme in Nigeria’s electoral processes.” The umbrella body of all registered political parties and political associations in Nigeria CNPP emphasized the necessity of an electoral system that genuinely reflects the wishes of the Nigerian populace. “We must strive to create an environment where elections are free from manipulation, violence, and intimidation,” the CNPP urged, calling on the Independent National Electoral Commission (INEC) to take decisive action to ensure the integrity of the electoral process.
The CNPP also expressed concern over premature declarations regarding the 2027 elections, stating, “It is disheartening to note that some individuals are already announcing that there is no vacancy in Aso Rock in 2027. This kind of statement not only undermines the democratic principles that our nation holds dear but also distracts from the pressing need for the current administration to earn the trust of the electorate.”
The CNPP viewed the upcoming elections as a pivotal moment for Nigeria. “The 2027 general elections present a unique opportunity for Nigeria to reclaim its position as a leader in democratic governance in Africa,” it remarked. The body called on all stakeholders — including the executive, legislature, judiciary, the Independent National Electoral Commission (INEC), and civil society organisations — to collaborate in ensuring that elections are transparent, credible, and reflective of the will of the Nigerian people.
As the most populous African country prepares for the 2027 elections, the CNPP urged all Nigerians to remain vigilant and committed to democratic principles. “We must work together to ensure that our elections are free from violence, intimidation, and manipulation,” the statement stated, reaffirming the CNPP’s commitment to promoting a peaceful and credible electoral process.
In conclusion, the CNPP congratulated the President-Elect of Ghana and the Ghanaian people on their remarkable achievements.
“We look forward to learning from their experience and working together to strengthen democracy in our region,” the CNPP concluded.
By Kenechukwu Aguolu
The proposed tax reform, involving four tax bills introduced by the Federal Government, has received significant criticism. Notably, it was rejected by the Governors’ Forum but was still forwarded to the National Assembly. Unlike the various bold economic decisions made by this government, concessions will likely need to be made on these tax reforms, which involve legislative amendments and therefore cannot be imposed by the executive. This article highlights the purposes of taxation, the qualities of a good tax system, and some of the implications of the proposed tax reforms.
One of the major purposes of taxation is to generate revenue for the government to finance its activities. A good tax system should raise sufficient revenue for the government to fund its operations, and support economic and infrastructural development. For any country to achieve meaningful progress, its tax-to-GDP ratio should be at least 15%. Currently, Nigeria’s tax-to-GDP ratio is less than 11%. The proposed tax reforms aim to increase this ratio to 18% within the next three years.
A good tax system should also promote income redistribution and equality by implementing progressive tax policies. In line with this, the proposed tax reforms favour low-income earners. For example, individuals earning less than one million naira annually are exempted from personal income tax. Additionally, essential goods and services such as food, accommodation, and transportation, which constitute a significant portion of household consumption for low- and middle-income groups, are to be exempted from VAT.
In addition to equality, a good tax system should ensure equity and fairness, a key area of contention surrounding the proposed reforms. If implemented, the amendments to the Value Added Tax could lead to a significant reduction in the federal allocation for some states; impairing their ability to finance government operations and development projects. The VAT amendments should be holistically revisited to promote fairness and national unity.
The establishment of a single agency to collect government taxes, the Nigeria Revenue Service, could reduce loopholes that have previously resulted in revenue losses, provided proper controls are put in place. It is logically easier to monitor revenue collection by one agency than by multiple agencies. However, this is not a magical solution. With automation, revenue collection can be seamless whether it is managed by one agency or several, as long as monitoring and accountability measures are implemented effectively.
The proposed tax reforms by the Federal Government are well-intentioned. However, all concerns raised by Nigerians should be looked into, and concessions should be made where necessary. Policies are more effective when they are adapted to suit the unique characteristics of a nation, rather than adopted wholesale. A good tax system should aim to raise sufficient revenue, ensure equitable income distribution, and promote equality, equity, and fairness.
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