President Muhammadu Buhari has approved the payment of outstanding pension liabilities under the Contributory Pension Scheme (CPS).
The Federal Government will comply with the Pension Reform Act (PRA) 2004, ending a seven years default.
The pension reforms were enacted in 2004 to ensure that every worker in either the public service (of the federation, the public service of the Federal Capital Territory (FCT), states and local governments) or the private sector receives his retirement benefits timeously.
President Buhari last week committed to implementing the provisions of PRA 2004, to turn around the fortunes of employees, retirees and pension operators.
PenCom Director-General, Mrs. Aisha Dahir-Umar said: “President Muhammadu Buhari has approved PenCom’s submission on the payment of some critical aspects of the outstanding pension liabilities of the Federal Government under the CPS.
“Specifically, the President has approved payment of outstanding accrued pension rights for verified and enrolled retirees of treasury-funded MDAs that retired, but are yet to be paid their retirement benefits, as well as the backlog of death benefits claims due to beneficiaries of deceased employees of treasury funded MDAs; payment of 2.5 per cent differential in the rate of employer pension contribution for Federal Government’s retirees and employees which resulted from the increase in the minimum pension contribution for employers from 7.5 per cent to 10 per cent in line with Section 4(1) of the PRA 2014. Payments for retirees and employees would take effect from July 2014.
“It is worthy to note that, subsequently, the Federal Government is expected to continue with the payment of the 10 per cent rate of employer pension contribution for its employees, thus ensuring a remittance of at least 18 per cent monthly (employer 10 per cent and employee eight per cent) as provided by the PRA 2014. Funds have already been made available for the settlement of the above stated pension liabilities. Accordingly, remittance into the various Retirement Savings Accounts (RSAs) of the affected retirees and employees is currently being processed. The affected retirees and employees would be notified in due course by their Pension Fund Administrators (PFAs).
She continued: “The settlement of the outstanding accrued pension rights of verified and enrolled Federal Government’s retirees and compliance with the reviewed rate of pension contributions are significant developments, that have resolved the challenges in these aspects that have lingered since 2014.
“Finally, the Board and Management of the Commission reiterates their appreciation to Mr. President for his untiring support and commitment to the implementation of the Contributory Pension Scheme and ensuring the welfare of retirees.”
