The National Pension Commision (PenCom) on Monday said it had commenced payment of the 2.5 per cent differentials of 2004 and 2014 pension contribution specified by the Pension Reform Act (PRA) to retirees.
The Director General, PenCom, Mrs Aisha Dahir-Umar, said this at the 2021 Journalist Workshop organised by the Commision in Lagos with the theme: “Positioning the Pension Industry in the Post COVID Era.”
Represented by Mr Peter Aghahowa, Head, Corporate Communications, PenCom, Dahir-Umar said the payment of 2.5 per cent differential in the rate of employer’s pension contribution for FGN retirees and employees was approved by President Muhammadu Buhari.
Dahir-Umar explained that the differential resulted from the increase in the minimum pension contribution for employers from 7.5 per cent to 10 per cent, in line with Section 4(1) of the Pension Reform Act (PRA) 2004.
“These payments would undoubtedly boost the RSA balances of the beneficiaries towards better retirement benefits.
“The settlement of these outstanding accrued pension rights of verified and enrolled FGN retirees would result in reversing a major challenge that has lingered since 2014.
“Also the commencement of payment of the reviewed monthly pension contribution rate by the Federal Government is another significant step in ensuring compliance with the PRA 2014,” she noted.
Mr Saleem Abdulrahman, Head, Contribution and Bond Redemption Department, PenCom said the beneficiaries were retirees between 2019 and 2020 of the Federal Government Treasury Funded Ministries, Departments and Agencies (MDA’s).
“Some of the retirees may likely get additional lumpsum or enhanced annuity or programmed withdrawal.
“We have also begun the computation of the active employees to enable payment, ” Abdulrahman said.
He added that the commission had also begun computing the details of retirees between July 1, 2014 to Dec. 2018 and would pay them soon.
The 2014 PRA as amended established a Contributory Pension Scheme (CPS) whereby the employers were required to contribute 10 per cent of the employees’ salary to the scheme monthly.
The 10 per cent minimum contribution by employers is an increase of 2.5 per cent over the 7.5 per cent contribution stipulated by the repealed 2004 PRA.
The Act also mandated employees to contribute a minimum of 8 per cent to the scheme monthly.