Pension Trust Deed (Nigeria)
PENSION TRUST DEED
Pension Reform Act 2014 | Trustee Investments Act (Cap T22, LFN 2004) | Companies and Allied Matters Act 2020 (CAMA 2020)
THIS PENSION TRUST DEED is made on [Deed Date]
BETWEEN:
(1) [Employer Name] (RC: [Employer CAC]) of [Employer Address] (hereinafter referred to as the "Principal Employer"); AND
(2) [Trustee Name] of [Trustee Address] (hereinafter referred to as the "Trustee").
1. ESTABLISHMENT OF TRUST
1.1 The Principal Employer hereby establishes the [Scheme Name] (the "Scheme") as a [Scheme Type] pension scheme for the benefit of all eligible employees of the Principal Employer.
1.2 The Trustee hereby accepts appointment as trustee of the Scheme and declares that it holds and will hold all assets of the Scheme (the "Fund") on trust for the members of the Scheme exclusively and separately from the assets of the Principal Employer, in accordance with this Deed and the Pension Reform Act 2014.
1.3 The Scheme is registered with the National Pension Commission (PenCom) under Scheme Registration No. [PenCom Reg Number] in accordance with Section 39 of the Pension Reform Act 2014.
2. CONTRIBUTIONS
2.1 The Principal Employer shall contribute [Employer Contrib Rate] of each eligible member's monthly pensionable emoluments to the Fund.
2.2 Each eligible member shall contribute [Employee Contrib Rate] of their monthly pensionable emoluments, which the Principal Employer shall deduct at source and remit to the Fund.
2.3 All contributions shall be remitted to the Fund within 7 working days of salary payment each month in compliance with Section 11(3) of the Pension Reform Act 2014.
3. MEMBER BENEFITS
3.1 A member who retires at or after the normal retirement age of [Retirement Age] is entitled to receive retirement benefits from the Fund as determined by the Scheme Rules.
3.2 A member who dies while in the service of the Principal Employer shall be entitled to the group life insurance proceeds under Section 9 of the Pension Reform Act 2014, credited to the member's account in the Fund, payable to the member's nominated beneficiary.
3.3 A member who becomes permanently incapacitated shall be entitled to early retirement benefits from the Fund in accordance with the Scheme Rules and PenCom guidelines.
4. TRUSTEE POWERS AND DUTIES
4.1 The Trustee shall invest the Fund in accordance with PenCom's Regulation on Investment of Pension Fund Assets and the Trustee Investments Act (Cap T22, LFN 2004).
4.2 The Trustee shall act in the best interests of the members at all times, maintain proper accounts and records, commission annual actuarial valuations for defined benefit schemes, and submit annual returns to PenCom as required by the Pension Reform Act 2014.
4.3 The Fund shall be held separately from the assets of the Principal Employer and shall not be available to the Principal Employer's creditors in any insolvency proceedings under CAMA 2020.
5. GOVERNING LAW
5.1 This Deed is governed by the Pension Reform Act 2014, the Trustee Investments Act (Cap T22, LFN 2004), and the laws of [Governing State]. Any dispute shall be referred to the Federal High Court of Nigeria or to arbitration under the Arbitration and Conciliation Act (Cap A18, LFN 2004).
Principal Employer (Authorised Signatory)
________________
Signature
Trustee (Authorised Signatory)
________________
Signature
What Is a Pension Trust Deed (Nigeria)?
A Pension Trust Deed in Nigeria conveys rights in land or assets, taking effect once executed by the parties to it.
Section 39 of the Pension Reform Act 2014 authorises employers in the private sector to establish defined benefit or defined contribution pension schemes that are supplementary to or in lieu of the mandatory Contributory Pension Scheme (CPS), subject to PenCom's approval and compliance with PenCom's minimum benefit standards. An employer-sponsored pension scheme established by trust deed must be funded — the scheme's assets must be held separately from the employer's assets — and managed by trustees who are bound by fiduciary duties under Nigerian equity law and the Pension Reform Act 2014.
The trustees of a Nigerian pension trust owe fiduciary duties to the scheme members, including the duty to act in the members' best interests, the duty of prudent investment under the Trustee Investments Act (Cap T22, LFN 2004), and the duty to comply with PenCom's Regulation on Investment of Pension Fund Assets. Corporate trustees — typically trust companies or pension trustees licensed by PenCom — provide professional trusteeship services and must be registered with the Corporate Affairs Commission (CAC) under CAMA 2020.
A Pension Trust Deed differs from a Pension Contribution Schedule (which records monthly remittances to the CPS) and from a Pension Nomination Form (which designates RSA beneficiaries). The trust deed is the constitutional document of the occupational scheme and governs all aspects of scheme operation, from the appointment and removal of trustees to the calculation and payment of retirement benefits.
The legal framework governing the Pension Trust Deed (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a Pension Trust Deed (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Pension Reform Act 2014 sets the foundational requirements.
When Do You Need a Pension Trust Deed (Nigeria)?
A Pension Trust Deed in Nigeria is needed when an employer wishes to establish a formal occupational pension scheme for its employees that is separate from or supplementary to the mandatory CPS.
A Pension Trust Deed is required when a large Nigerian employer — such as a multinational company with Nigerian operations, a major bank, or a public institution — wishes to provide its employees with defined benefit pension entitlements that exceed the minimum benefits available under the mandatory CPS, and needs a formal trust structure to hold and administer the scheme's assets.
A Pension Trust Deed is needed when an employer wishes to establish a defined contribution supplementary scheme under Section 39 of the Pension Reform Act 2014, pooling employer and employee voluntary additional contributions (AVCs) into a trust fund that is managed by professional trustees for the long-term benefit of the members.
A Pension Trust Deed is required when the trustees of an existing occupational pension scheme wish to consolidate, modernise, or replace the existing trust documentation to reflect amendments to the Pension Reform Act 2014, updated PenCom regulations, or changes in the scheme's membership and benefit structure.
A Pension Trust Deed is needed when a company undergoing a merger, acquisition, or restructuring under CAMA 2020 must establish a new pension trust for the combined entity's employees, or must transfer the existing pension trust's assets to a new trustee structure as part of the transaction.
Parties in Nigeria should prepare a Pension Trust Deed (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Pension Trust Deed (Nigeria)
A valid Pension Trust Deed in Nigeria must contain the following essential elements to satisfy the Pension Reform Act 2014 and PenCom requirements.
Establishment of Trust: A clear declaration by the principal employer that the pension fund assets are held on trust for the scheme members, separate from the employer's own assets, and subject to the duties and powers set out in the deed.
Parties: The principal employer (the company sponsoring the scheme), the trustees (individuals or a corporate trustee licensed by PenCom), and the scheme members (current and former employees). For corporate trustees, include the CAC RC number under CAMA 2020.
Trust Fund: A description of the assets comprising the trust fund — employer contributions, employee contributions (if applicable), investment income, and any insurance proceeds — and confirmation that the assets are held by the trustees free from the employer's creditors.
Trustee Powers: The trustees' powers to invest the fund in approved assets under PenCom's Regulation on Investment of Pension Fund Assets and the Trustee Investments Act (Cap T22, LFN 2004), to appoint investment managers and custodians, and to administer benefits.
Member Benefits: The retirement benefit formula (for defined benefit schemes), contribution rates (for defined contribution schemes), and the conditions for payment of retirement, death-in-service, and ill-health benefits.
Actuarial Valuations: For defined benefit schemes, the requirement for periodic actuarial valuations by a Fellow of the Society of Actuaries of Nigeria (SAN) or equivalent, and the employer's obligation to fund any actuarial deficit identified.
PenCom Registration: The obligation to register the scheme with PenCom under Section 39 of the Pension Reform Act 2014 and to comply with PenCom's ongoing reporting and disclosure requirements.
Amendment and Winding Up: The procedure for amending the trust deed with PenCom's consent, and the priority of claims on winding up — members' benefits must rank ahead of the employer's claims on any surplus.
Additional compliance elements for a Pension Trust Deed (Nigeria) used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.
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title = {Pension Trust Deed (Nigeria) (Nigeria)},
year = {2026},
howpublished = {\url{https://forms-legal.com/nigeria/financial/agreements/pension-trust-deed-nigeria}},
note = {Free legal document template. Based on Pension Reform Act 2014}
}Also available for these jurisdictions:
Frequently Asked Questions
The Contributory Pension Scheme (CPS) established under the Pension Reform Act 2014 is the mandatory individual account-based pension system in Nigeria, where each employee has a personal Retirement Savings Account (RSA) with a PenCom-licensed PFA. The RSA is the employee's property and follows them from employer to employer. A Pension Trust Deed, by contrast, establishes an employer-sponsored occupational pension scheme under a trust structure, where the employer pools contributions in a centrally managed trust fund for the benefit of all members. Occupational pension schemes may be defined benefit (promising a specific retirement income based on final salary and years of service) or defined contribution (providing whatever the accumulated fund buys at retirement). Under Section 39 of the Pension Reform Act 2014, occupational schemes must be registered with PenCom and must meet minimum benefit standards.
Trustees of a pension trust in Nigeria may be individual trustees (typically senior managers or independent professionals) or a corporate trustee (a trust company registered with the CAC under CAMA 2020 and licensed by PenCom). Under Section 40 of the Pension Reform Act 2014, pension fund trustees must be registered with PenCom and must meet PenCom's fit and proper criteria — including minimum capital requirements for corporate trustees, professional qualifications, and absence of criminal convictions. The minimum number of trustees for an occupational scheme trust in Nigeria is typically three. Individual trustees owe fiduciary duties under equity law and the Trustee Investments Act (Cap T22, LFN 2004), including the duty of prudent investment and the duty to act in the best interests of the members rather than the employer. Trustees who breach their fiduciary duties may be personally liable to the scheme members.
Yes. Under Section 39 of the Pension Reform Act 2014, an employer who wishes to establish a supplementary or alternative occupational pension scheme in Nigeria must obtain the prior approval of the National Pension Commission (PenCom). The application process requires the employer to submit the draft trust deed and scheme rules to PenCom, demonstrate that the scheme meets PenCom's minimum benefit standards, appoint PenCom-registered trustees, and pay the prescribed application fee. PenCom reviews the scheme documentation to ensure compliance with the Pension Reform Act 2014, PenCom's Investment Regulations, and other applicable guidelines. Once registered, the scheme must comply with PenCom's ongoing reporting requirements — including annual actuarial valuations for defined benefit schemes and periodic investment performance reports. An unregistered occupational scheme does not receive the tax benefits available to registered schemes under the Companies Income Tax Act (CITA).
A registered occupational pension trust in Nigeria receives significant tax benefits under Nigerian law. Employer contributions to a registered pension scheme are deductible from the employer's taxable income under Section 20 of the Companies Income Tax Act (CITA) Cap C21, LFN 2004, reducing the employer's corporation tax liability. Employee contributions are deductible from the employee's taxable income under Section 4(2) of the Pension Reform Act 2014 and Section 33 of the Personal Income Tax Act (PITA) Cap P8, LFN 2004, reducing the employee's PAYE liability. Investment income earned by the pension trust fund is exempt from income tax under Section 19(3) of CITA. These tax incentives make registered pension trusts an attractive vehicle for structured retirement savings. The Federal Inland Revenue Service (FIRS) and relevant state internal revenue services administer these tax benefits in compliance with the Companies Income Tax Act and PITA respectively.
A key feature of a pension trust in Nigeria is that the trust fund assets are legally separate from the employer's own assets and cannot be claimed by the employer's creditors in insolvency proceedings. Under trust law principles as applied in Nigeria and Section 72 of the Pension Reform Act 2014, the pension fund assets are held by the trustees exclusively for the benefit of scheme members — they do not form part of the employer's estate in a winding-up under the Companies and Allied Matters Act 2020 (CAMA 2020). This means that even if the employer becomes insolvent, the trust fund remains intact and the trustees continue to administer the scheme for the members' benefit. PenCom monitors employer-sponsored pension trusts to ensure that contributions are being remitted regularly and that the trust fund is adequately funded to meet the scheme's liabilities — for defined benefit schemes, an actuarial deficit must be remedied by the employer before insolvency intervenes.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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