Abubakar, like many FG retirees is getting frustrated over non-payment of pension accrued rights

Fifty-nine years old Abubakar, after thirty-five years in the civil service of the federation retired early 2016 with the hope of falling back on his pensions, having enrolled in one of the Pension Fund Administrators (PFAs) in the country. Before his exit from public sector service in February 2016, he completed his pre-retirement documentations and verifications exercises and like many other retirees in his set were certain they would start receiving their monthly pensions as and when due, just as promised under the Contributory Pension Scheme.

One year after, Abubakar is stranded and getting frustrated having not received his pensions and now out of cash to survive. When he ran to his Pension Fund Administrator (PFA), he was told that his employer, the Federal Government was yet to remit his pension accrued rights, which are his pension accumulations under the defunct benefit scheme before the commencement of the CPS following the Pension Reform Act 2004 as amended in 2014.

Session 15 (1)of the Pension Reform Act 2014 provides that “as from 25 June, 2004, being the commencement of the Pension Reform Act, 2004, the accrued pension right to retirement benefits of any employee who is already under any pension scheme existing before the commencement of that Act and has over 3 years to retire shall – (a) in the case of employees of the Public Service of the Federation where the scheme is unfunded, be recognized in the form of an amount acknowledged through the issuance of Federal Government Retirement Benefits Bonds by the Debt Management Office in favour of the employees and the bond issued under this subsection shall be redeemed upon the retirement of the employee in accordance with section 39 of this Bill and the amount so redeemed shall be added to the balance of the retirement savings account of the employee and applied in accordance with the provisions of section 7 of this Bill.

While sub-section (C) provides that “in the case of the employees of the public Service of the Federation, Federal Capital Territory or in the Private Sector, where the scheme is funded, credit the Retirement Savings accounts of the employees with any funds to which each employee is entitled and in the event of an insufficiency of funds to meet this liability the shortfall shall immediately become a debt of the relevant employee and shall have priority over any other claim.

Chinelo Anohu-Amazu, director general, National Pension Commission had explained that at the beginning of the reform there was cut-off date and those who had three or less number of years to go didn’t have to join the scheme, while those who had four or more years to go, joined the new scheme.

“Already, they were mid way into their career and so had some rights due them. So the law says, those rights are to be computed as though they had retired in 2004 and then converted as bond to be redeemed at the time of their retirement.”

 “This is the issue, and the PFA’s now saddled with managing RSA under the CPS are unable to pay because the payment schedule says they will need to add both the accrued rights and the contributions together, so that there will be agreement on whether it is for lump sum, programmed withdrawal or it’s for annuity. It will have to be a totality of what is due you; otherwise, it will not be a realistic payment, Anohu-Amazu stated.

Based on the number of verified and enrolled FG employees that retired from January to December in 2016 under the CPS as well as deceased employees within 2016, PenCom requested for the provision of the sum of N91, 914,899,000.00 in the 2016 FGN Appropriation Bill. However, the National Assembly approved only the sum of N50, 195,808,918.00 in the 2016 Appropriation Act, thereby resulting in a shortfall of N41, 719,090,082.00.

Furthermore, out of theN50, 195,808,918.00 appropriated for the Retirement Benefits Bond Redemption Fund (RBBRF) account in the 2016 Appropriation Act, only N18, 823,428,342.00 had so far been released into the RBBRF account as at date. This leaves an outstanding balance in the sum of N31, 372,380,576.00 which are yet to be released for 2016.

Many, like Abubakar whose hope have been dashed by this ill treatment are looking back, and asking themselves why they did not engage in corruption to enrich themselves while in office. But then, they are also thinking that the right thing should be done so that those currently in service do not get discouraged from hard work, or start to think evil to better their tomorrow.

Stakeholders are therefore calling on the federal government to quickly meet up these expectations by approving and releasing the appropriate amounts of money as presented by the industry regulator to keep this scheme functional.

PenCom, says to keep the pension scheme working, it’s praying that National Assembly Joint Committee On Appropriations to ensure the appropriation and release of the sum of N73,091,470,658.00 to pay January to December 2016 retirees of the Federal Government;ensure the appropriation of the entire sum of N113,023,255,000.00 for 2017 retirees of the Federal Government, as determined by PenCom pursuant to Section 39(3) of the Pension Reform Act (PRA) 2014; and ensure adequate appropriation under the Federal Government’s Recurrent Expenditure in order to facilitate the implementation of the new eighteen percent (18 percent) pension contributions rate.

The Commission is also praying on the committee to ensure the appropriation of the sum of N79,155,550,000.00 for payment ofpension increase for the 79,961 pensioners who retired under the CPS from 2004 to 2014;ensure the appropriation of the sum of N10,039,161,783.00 being the Federal Government’s statutory contribution to the funding of the Pension Protection Fund;  ensure the appropriation of the sum of N440,047,832.00 being theshortfall in the retirement benefits of 24 retired Heads of Civil Service of the Federation and Federal Permanent Secretaries that had earlier enrolled with the Commission and 16 Federal Permanent Secretaries scheduled to retire in 2017; and finally ensure the appropriation of the total sum of N5,099,923,346.00 as overhead and capital subvention to facilitate the Commission’s activities in 2017.