- Calls for amendment of Pension Reform Act 2014
The foremost pension regulatory body, National Pension Commission, PenCom has expressed discontent on the poor pattern of retirees’ pension payment.
Aisha Umar, the Director-General, PenCom made this known while presenting her welcome remarks during the oversight visit of the senate committee on establishment and public services to the commission in Abuja.
According to the PenCom boss, the insufficient amounts for payment of accrued pension rights of retirees coupled with the late or non-release of full appropriated amounts has led to the delay in pension payments of most Federal Government workers that retired from March 2020 to March 2021.
“The fundamental objective of the pension reform is to ensure that every worker receives their retirement benefits as at when due. However, it is sad to report that today, there are a large number of Federal Government employees who retired from March 2020 to March 2021 under the Contributory Pension Scheme (CPS) that are yet to receive their pensions due to non-payment of their accrued pension rights.
“This challenge, which started in 2014, was essentially triggered by the appropriation of insufficient amounts for payment of accrued pension rights of retirees and further aggravated by late or non-release of full appropriated amounts,” She said.
Highlighting further hindrances to delivering timely pension funds to retirees, Umar noted government’s non-compliance with the new minimum statutory rate of pension contribution of 18 percent since 2014; non-payment of approved 15 percent and 33 percent pension increases to pensioners under the CPS, non-payment of the shortfall for payment of full retirement benefits of retired heads of service and permanent secretaries; and non-payment of FGN pension protection levy.
In her words, “These have created a sad and negative impression on the full realization of the objectives of the CPS in Nigeria.”
She lauded the effort of the senate committee in gearing the National Assembly to intervene in the matter of payment of outstanding pension liabilities of the federal government noting that the problem is farfetched from the fact that pension liability was a moving target that increases on a monthly basis as employees retired.
She, however, called for the amendment of some section of the current pension act as a solution to the persistent complaint lodge. “Another issue that is worth mentioning to this distinguished committee is the persistent complaints against certain sections of the Pension Reform Act 2014, which needs amendments. This is normal with every new system and the experience of the CPS in Nigeria is bound to be the same. Consequently, the commission had obtained inputs from critical stakeholders and cataloged their proposed amendments of provisions of the PRA 2014.
“However, as was done in the first review exercise that birthed the present Act, it is imperative to subject the proposed amendments to extensive experts’ and stakeholders’ engagements prior to presentation to the Federal Executive Council and then National Assembly for further legislative action.”
The PenCom boss further pointed out that the commission appreciates that the senate committee is committed to supporting these processes from the early stage as it has collaborated with the house committee on pensions in order to ensure a smooth and qualitative exercise.
Equities January 3, 2020