The Federal Government has approved the payment of some critical aspects of the outstanding pension liabilities of its retirees under the Contributory Pension Scheme.
The beneficiaries are retirees of treasury-funded Federal Ministries, Department and Agencies (MDAs), whose names were submitted by PenCom but are yet to be paid their retirement benefits. It also includes the backlog of death benefit claims due to beneficiaries of deceased employees of treasury-funded MDAs.
The presidential approval also guaranteed the payment of 2.5 per cent differential in the rate of employer pension contribution for federal retirees and employees, which resulted in the increase in minimum pension contribution for employers from 7.5 per cent to 10 per cent in line with Section 4(1) of the PRA (Pension Reform Act) 2014. Payments for retirees and existing employees will take effect from July 2014.
Included in the approval is the Federal Government’s compliance with the PRA 2014 demand that employers’ contribution for employees should not be less than 10 per cent while employees are to put in 8 per cent, ensuring a monthly remittance of at least 18 per cent.
The Head of Corporate Communications Department, National Pension Commission (PenCom), Mr. Peter Aghahowa, said funds have already been made available for the settlement of pension liabilities while remittance into the various Retirement Savings Accounts (RSAs) of the affected retirees and employees is currently being processed.
PenCom said the affected retirees and employees would be notified in due course by their respective Pension Fund Administrators (PFAs).
It added that the government has made significant achievements by settling the outstanding accrued pension rights of verified and enrolled federal retirees in compliance with the reviewed rate of pension contributions that have resolved the challenges that lingered since 2014.