Amidst the growing concerns over Nigeria government’s inability to meet its obligations, reports have showed that the Federal Government has accumulated over N140 billion pension liabilities in recent times.
According to the National Pension Commission (PenCom), from 2014 to date, there has been a decline in budgetary provision in funding the Retirement Benefit Bonds Redemption Fund (RBBF) account and the remittance of monthly contribution, adding that sum of N20.07 billion is required to pay all outstanding accrued benefits for deceased and mandatory retirees of the Federal Government for the periods October to December 2015 and the sum of N79.16 Billion has been computed as the arrears of 15 per cent pension increase owed to 79,961 Federal Government retirees under the Contributory Pension Scheme (CPS) as at December, 2014.
PenCom also noted that N50.20 billion was provided for the 2016 FGN Budgetary Appropriation for the Retirement Benefits Bond Redemption Fund (RBBRF) Account presented to the National Assembly, compared to the Commission’s projection of N91.91 Billion, resulting in a shortfall of N41.71 Billion.
Chairman, Pension Fund Operators Association of Nigeria (PenOp) Eguarekhide Longe, said compliance with regard to remittances of pension contributions from the Public Sector on both the Federal and State levels have lagged notably, stressing that whilst remittances from the Federal Government through the National Pension Commission (Pencom) were last received for September 2015, some states have outstanding remittances dating back over two years.
Amidst the dire economic challenges, Longe, acknowledged that pension assets under the CPS grew by 15% from N4.61trillion as at end of December 2014 to N5.3trillion as at the end of December 2015.
He also mentioned that the private sector remittances, though impacted by the adverse economic environment, but have been more consistent.
Whilst the private sector is in compliance to the amended pension Act, it is shameful that the Federal Government is yet to commence the implementation of the revised 18 per cent minimum pension contributions for its employees as stipulated under Section 4 of the PRA 2014.
It is noteworthy that only few state governments have implemented the Contributory Pension Scheme (CPS), whereby leaving many workers’ fate hanging after their retirement from active service.
PenCom said from the inception of the pension reform in 2004, the Federal Government had been religiously implementing the Contributory Pension Scheme by payment of monthly contributions of its employees in a dedicated account in the Central Bank of Nigeria, the Contributory Pension Account.
It noted that the Federal Government was equally making payment of five per cent of its monthly wage bill into the Retirement Benefits Bond Redemption Fund Account for the payment of the accrued pension rights of its employees who had worked under the old Defined Benefits Scheme and transited to the CPS, until the recent financial crisis, which had hindered its obligations.