The Pension Fund Operators Association of Nigeria (PenOp) has called on the Federal Government to urgently release the outstanding accrued rights of its retirees so that their benefits can be processed and settled.
The President of PenOp Misbahu Yola, who made this call while addressing journalists in Abuja, pointed out that the delay in payment of the retirees’ accrued rights is affecting the confidence in the pension system.
“There are a few challenges with the accrued rights. We have been told that it would be paid soon. The last was paid in February, 2015. These are issues that affect the confidence in the system. Even when the exco of PenCom visited the presidency, they raised the issue of the accrued rights and the president promised the accrued rights would be paid soon. The accrued rights and outstanding contribution rights is about N100 billion or less,” he said.
He said the Contributory Pension Scheme (CPS) works perfectly, but the delayed accrued rights payment is dragging the shadow of the old scheme into the new scheme making it look ineffective.
He noted that without the rights, operators cannot aggregate the retirement savings account balance and calculate retirees’ lump sum and programmed withdrawal, thereby leaving them without pensions.
The Director-General, National Pension Commission (PenCom) Mrs. Chinelo Anohu-Amazu, in an Introductory Notes to the President Muhammadu Buhari, when the executives of the commission paid a visit to the president, said the payment of retirement benefits under the Scheme to retirees, as well as death claims to beneficiaries of deceased employees, were regular and timely except for the delays being experienced in the settlement of accrued benefits of FGN retirees and deceased employees, whenever there are delays in the funding of the Retirement Benefits Bond Redemption Fund by the FGN as is the case in 2012, 2014 and 2015.
She said N483.33 billion has been released into the Retirement Benefits Bonds Redemption Fund Account by the FGN, which was invested by the Central Bank of Nigeria and yielded N7.71 billion between 2006 and March 2015.
She however noted that the Federal Government is yet to release monthly mandates for the payment of accrued rights for September to December 2014, and April to August 2015 amounting to N35.30 billion.
She said the accrued benefits of 8,193 retirees and death benefits of 4,847 deceased employees amounting to N48.39 billion were processed for the period, February to August 2015, but were yet to be settled by the federal government.
She stated that this clearly shows that even if the total outstanding monthly mandates were release there would still be a shortfall of N13.09 billion.
In addition, the total mandate for September to December 2015 was N20.08 billion while the total accrued benefits for the period was N23.12 billion, which left a shortfall of N3.04 billion. Thus, even if all the mandates for the period September 2014 to August 2015 were released, there will still be underfunded to the tune of N16.13 billion, she said.
She therefore, called for immediate settlement of the outstanding in order to avert crisis in the industry.
“In this regard, therefore, Mr. President is hereby respectfully invited to note the need for immediate settlement of N35.3 billion arrears by the Federal Government on accrued benefits for the months of September to December 2014 and April to August 2015,” she said.