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The short answer
If your Lagos staff are employed through a Nigerian entity or an employer of record, yes: the Pension Reform Act, 2014 requires a minimum 18% of monthly pay (10% employer, 8% employee) for organisations with three or more employees, remitted within seven working days of paying salary. For a Ghana company employing staff directly from abroad, PenCom's position is not published, so take advice.
Nigeria's Contributory Pension Scheme (CPS) is run through Pension Fund Administrators (PFAs), with each worker holding a Retirement Savings Account (RSA). PenCom, the regulator, enforces it. A Ghana company with a few staff in Lagos needs to know three things: who the scheme covers, what it costs, and whether it reaches an employer outside Nigeria.
Who the scheme covers
PenCom's Micro Pension framework states that the Pension Reform Act, 2014 applies to the public service and to private sector organisations "in which there are three or more employees". Employees of smaller organisations, and the self-employed, can join under PenCom's guidelines, including the Micro Pension Plan. Some older summaries describe a 15-employee threshold; PenCom's own page says three.
What it costs
| Item | Rule | Source |
|---|---|---|
| Minimum contribution | 18% of monthly emoluments: 10% employer, 8% employee | PenCom FAQ 2023 |
| Employer bearing it all | Allowed | PenCom FAQ 2023 |
| Remittance | Within seven working days of paying salary, to the custodian named by the employee's PFA | PenCom FAQ; recovery framework |
| Late payment | Penalty set by PenCom, not less than 2% of unpaid contributions for each month of default | PenCom recovery framework |
| Group life insurance | At least three times annual total emolument for every employee | PenCom GLIP notice |
Example, for illustration only. A Lagos employee on monthly emoluments of ₦500,000 (the base used should include at least basic, housing and transport): employer 10% = ₦50,000; employee 8% = ₦40,000 deducted from pay; total ₦90,000 to the employee's PFA custodian within seven working days of payday. Pension contributions are deductible for Nigerian income tax under the Nigeria Tax Act, 2025.
Does it reach a Ghana employer?
PenCom's pages describe obligations on employers, and the process to get an employer code runs through a PFA with company documents such as a certificate of incorporation and a tax identification number. We found no PenCom statement on a foreign company with no Nigerian registration that employs staff in Nigeria directly. In practice, that gives four routes:
- Employer of record. A Nigerian EOR employs the staff and handles pension, PAYE and group life cover; see Can my Ghana business use an employer of record in Nigeria?.
- Nigerian subsidiary. A CAC-registered company becomes the employer, gets an employer code and runs the scheme in full.
- Ask a PFA. Some may be willing to set up arrangements for a foreign employer; get the position in writing.
- Pay an allowance and let staff contribute. Weakest route: it leaves the legal question open and PenCom's protections out of reach.
What staff lose if nobody contributes
The contributory scheme is more than retirement savings. The PenCom FAQ and the 2014 Act let an RSA holder use part of their balance in defined situations, and PenCom's group life rule means a worker's family receives a payout if the worker dies in service. A Lagos employee paid only an allowance, with no RSA contributions and no group life policy, has neither. Skilled staff increasingly ask about this at offer stage, so the route you choose affects hiring as well as compliance.
There is also the question of what happens if a Nigerian employee later moves to Ghana. Their RSA stays in Nigeria with their PFA; see What happens to my Nigerian RSA pension now I live in Ghana? for the employee's side.
Getting an employer code
PenCom's FAQ says an employer code is free and is requested in writing through any PFA, on company letterhead, with the certificate of incorporation or registration and evidence of a tax identification number. Those documents are Nigerian ones, which is why the subsidiary and EOR routes are the practical answers for most Ghana companies.
If you have a Nigerian entity: the compliance file
- employer code from PenCom through a PFA;
- each employee's RSA PIN, collected at hiring;
- monthly contribution schedules and payment evidence;
- a current group life insurance policy, with the certificate displayed;
- PenCom's Pension Clearance Certificate, now issued online at pcc.pencom.gov.ng within 72 hours of an approved application, which you need where counterparties ask for it.
Where Pryme fits
Paying staff in naira is where most cross-border employers start. Pryme payroll on a Business Account opened from Ghana runs naira salaries, and the Compliance agent can prepare a reminder for each seven-day pension window for a person to act on. Employee rates for staff are explained in Pension contributions in Nigeria: employer and employee rates.
Questions people ask
What is the minimum pension contribution in Nigeria?
18% of monthly emoluments: 10% from the employer and 8% from the employee, per PenCom.
How many employees before pension is compulsory in Nigeria?
Three or more, according to PenCom's own framework page.
When must Nigerian pension contributions be remitted?
Within seven working days of paying salary, to the custodian named by the employee's PFA.
Can a foreign company pay Nigerian pension for its staff?
PenCom has not published a route for employers with no Nigerian entity. Most use an employer of record or a Nigerian subsidiary.
Sources
- PenCom: Frequently asked questions, 2023 edition · accessed Oct 2026
- PenCom: Framework for Micro Pension Plan · accessed Oct 2026
- PenCom: Framework for recovery of outstanding pension contributions and penalty from defaulting employers · accessed Oct 2026
- PenCom: notice on Group Life Insurance Policy for employees · accessed Oct 2026
- PenCom: Step-by-step guide on Pension Clearance E-Certificate (Mar 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.