The federal government has ordered the payment of outstanding pension liabilities under the Contributory Pension Scheme(CPS), the National Pension Commission (PenCom) has said.
Established in Pension Reform Act 2014, the CPS is a mandatory scheme that compels both employees and employers in the public and private sectors to collectively save a minimum of 18 per cent of an employee’s monthly earnings into a Retirement Savings Account (RSA).
In a release by the Head of Corporate Communication of the commission, Peter Aghahowa, PenCom told retirees of Treasury-funded Federal Ministries, Departments and Agencies (MDAs) that 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 Contributory Pension Scheme.
“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,” the statement said.
“Payment of 2.5% differential in the rate of employer pension contribution for FGN retirees and employees which resulted from the increase in the minimum pension contribution for employers from 7.5% to 10% in line with Section 4(1) of the PRA 2014. Payments for retirees and existing employees would take effect from July 2014.”
The commission assured that the federal government as expected in the Pension Reform Act 2014 will continue with the payment of the 10 per cent rate of employer pension contribution for its employees, thus ensuring remittance of at least 18 per cent monthly (employer 10 per cent and employee eight per cent).
It also said that funds had already been made available for the settlement of pension liabilities and remittances into the various retirement savings accounts (RSAs) of the affected retirees and employees are currently being processed.
According to the commission, the affected retirees would be notified in due course by their respective pension fund administrators (PFAs).
It said the development is significant giving that it has been a challenge since 2014.
“The settlement of the outstanding accrued pension rights of verified and enrolled FGN 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”.