The Director-General of the National Pension Commission, Omolola Oloworaran, has said that retirees would soon be able to enjoy the benefits of their pension increases since 2007. Oloworaran said this during an interview on the NTA News following stakeholders’ meetings with licensed pension fund administrators....Read Full Article >>➤
The Federal Executive Council earlier this month approved the issuance of a Federal Government bond worth N758bn to settle outstanding pension liabilities owed to retirees under the old Defined Benefit Scheme.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, explained that the approval authorises the Debt Management Office to raise the funds needed to clear the backlog of pension arrears.
The PenCom highlighted that the payment of the pension arrears worth N387.5bn will come from the proceeds of the pension bond.
She said, “This indeed is a significant development in the pension industry. We have N387.5bn, which will be committed to pension increases since 2007. Yes, you heard me right; that was almost two decades ago. Some pension increases have been pending without the government paying for them, but this government under President Bola Tinubu has taken this issue seriously and will be paying all outstanding pension increases from 2007 to date.”
About N253bn out of the proceeds from the pension bond has also been dedicated to clearing accrued rights.
“Now, accrued rights are entitlements due to workers who were working with the Federal Government before the inception of the CPS in 2004 and, of course, workers who had three years or more before their retirement.
What this has done is to enable us to clear the backlog in accrued rights payments. We have been hearing a lot about delayed pension payments in the last few months since I took this role as DG. With this intervention, those delays will no longer happen, and they will be a thing of the past once the bond is issued.
Again, N253bn is dedicated to that.
“Then we move to the third category, which is the Pension Protection Fund, which I’m very passionate about. N107bn has been committed to the Pension Protection Fund. It is expected to augment pensions for low-income earners to enable them to earn a living wage. Since the enactment of the law in 2014, this is the first time that the government is contributing to this fund. So, once the bond has been issued and funds disbursed, retirees who currently earn low pensions will have the joy of their pension being augmented through these funds that have been approved.”
Oloworaran reiterated that PenCom was committed to working with other stakeholders to speed up the bond-issuance process.
“What we are doing in PenCom is to work with the relevant agencies to ensure all the processes that would lead to the issuance of the bond are concluded in record time. Once that is done, the PFAs will be credited. The retirement savings account of all retirees will be credited, and retirees will be able to go to PFAs to claim their entitlements.
Incidentally, we held the consultative forum with the PFAs, where they have committed to making sure that payments are made to retirees immediately after the bond issuance is concluded and funds are disbursed to retirement savings accounts. The PFAs will monitor this; PenCom will have oversight to ensure that PFAs are paying benefits and retirees are coming in to claim their benefits.”
The DG PenCom maintained that the commission was dedicated to rebuilding trust in the Contributory Pension Scheme in the country, saying, “The first thing for us is to build trust in the CPS, which has been waning in the last few years because of these outstanding liabilities. This payment allows us to build trust in the CPS and for Nigerians to now understand that this government has the interest of the ordinary Nigerian at heart. This allows us to expand the pension scheme to the informal sector, where we are currently not scratching the surface at all. It will help the informal sector to believe that when they contribute to the scheme, their funds are safe and will be managed effectively by PenCom.
“In addition, we are going to be able to expand the compliance net. This government has shown dedication, and with the support of the president, we will be able to ensure that every employer contributes to the CPS for their employees.”
Meanwhile, the Vice Chairman of Concerned Federal Pensioners, Akinyele Oludimu, called for clarity on the bond issuance for the sake of the retirees, saying, “It is a bond which no one can clarify the modalities. We are yet to receive any accrued pension increases and access the pension protection fund.”
Be the first to comment