Employees of the Federal Civil Services of the Nigeria, government agencies and parastatals who retired in the last 16 months may have to wait longer to access their pension benefits.
This is following delay by the Federal Government to pay pension accrued rights of their new retirees to enable them access their pensions from their Pension Fund Administrators (PFAs), as provided in the Pension Reform Act.
The Federal Government according to the National Pension Commission (PenCom) made payment of its employees accrued rights last in March 2022, to the tune of N14.92 billion, now running into over 16 months of backlog.
Accrued Pension Rights represents an employee’s benefits for the past years of service up to June 2004, when the Pension Reform Act (PRA) that birthed the Contributory Pension Scheme (CPS) came into effect.
Read also: Inflation, weakening naira threatening returns on pension fund – Adebiyi
Abdulqadir Dahiru, head of corporate communications department at the National Pension Commission (PenCom) speaking on the side-line of a one day workshop organised by the Commission for pension journalist in Lagos expressed appreciation to the Federal Government towards ensuring that accrued rights arrears are cleared.
“Government has done well in the past, but more needs to be done. It’s a challenge and the commission is doing everything possible to engage the government to offset the arrears, he said.
Abdulqadir who confirmed that public sector employees who left employment in the past months may suffer some delays due to unpaid accrued rights by the federal government said last payment was received in March 2022.
He however noted the commission would continue to engage the FG for payment of the accrued rights arrears, stating that this will speed up when newly appointed ministers settle down in their job.
PenCom disclosed that the Federal Government in March 2022 released the sum of N14.92 billion for the payment of accrued rights for retirees under the CPS, covering four months arrears, while FG had in January 2021 released N31.97 billion, and another N16.67 billion in December in same year 2021.
Aisha Dahir-Umar, had earlier disclosed in her report on the pension industry for 2021, that the Federal Government has paid a total of N980.18 billion to retirees of treasury funded Ministries, Departments and Agencies from the inception of the Contributory Pension Scheme in 2004 to December 2021.
Read also: Pension contributors cross 10m mark 19 years after sector reform
Session 15 (1)of the Pension Reform Act 2014 provides that “as from 25 June 2004, being the commencement of the Pension Reform Act, 2004, the accrued pension right to retirement benefits of any employee who is already under any pension scheme existing before the commencement of that Act and has over 3 years to retire shall –
In the case of employees of the Public Service of the Federation where the scheme is unfunded, it will be recognised in the form of an amount acknowledged through the issuance of Federal Government Retirement Benefits Bonds by the Debt Management Office in favour of the employees and the bond issued under this subsection shall be redeemed upon the retirement of the employee by section 39 of this Bill and the amount so redeemed shall be added to the balance of the retirement savings account of the employee and applied by the provisions of section 7 of this Bill.
While sub-section (C) provides that “in the case of the employees of the Public Service of the Federation, Federal Capital Territory or in the Private Sector, where the scheme is funded, credit the retirement Savings accounts of the employees with any funds to which each employee is entitled and in the event of an insufficiency of funds to meet this liability the shortfall shall immediately become a debt of the relevant employee and shall have priority over any other claim.
The objectives of CPS are to ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory, States, and Local government or the Private Sector receives his retirement benefits as and when due; and to assist improvident individuals by ensuring that they save to cater for their livelihood during old age.
