The National Pensions Commission (PenCom) announced on Monday that it had started paying retirees the 2.5% differentials of 2004 and 2014 pension contributions specified by the Pension Reform Law (PRA) .
PenCom Managing Director Ms Aisha Dahir-Umar said this during the 2021 Journalists’ Workshop organized by the Commission in Lagos on the theme: ‘Positioning the pension sector in the post-COVID era’.
Represented by Mr. Peter Aghahowa, Head of Corporate Communications, PenCom, Dahir-Umar said the payment of a 2.5 percent differential in the employer’s pension contribution rate for retirees and employees FGN employees was approved by President Muhammadu Buhari.
Dahir-Umar explained that the gap resulted from the increase in the minimum pension contribution for employers from 7.5% to 10%, in accordance with Article 4 (1) of the 2004 Reform Law. pensions (PRA).
“These payments would undoubtedly help boost the RSA balances of beneficiaries towards better retirement benefits.
“The settlement of these overdue accumulated pension rights of verified and enrolled FGN retirees would reverse a major challenge that has persisted since 2014.
“In addition, the start of payment of the revised monthly contribution rate by the federal government is another important step in ensuring compliance with the PRA 2014,” she noted.
Mr. Saleem Abdulrahman, head of the contribution and bond repayment department, PenCom, said the beneficiaries were retirees between 2019 and 2020 from ministries, departments and agencies (MDAs) funded by the federal government’s treasury.
“Some of the retirees can probably get an additional lump sum or an enhanced annuity or a scheduled withdrawal.
“We have also started calculating active employees to enable payment,” Abdulrahman said.
He added that the commission had also started calculating retiree details between July 1, 2014 and December 2018 and would pay them soon.
The Nigeria News Agency (NAN) reports that the 2014 PRA as amended established a Contributory Pension Plan (CPS) under which employers were required to contribute 10 percent of employees’ wages to the scheme monthly.
The minimum 10 per cent employer contribution represents a 2.5 per cent increase over the 7.5 per cent contribution provided for in the repealed 2004 PRA.
The law also required employees to contribute at least 8 percent to the plan monthly. (NAN)
