The Cheer News

Buhari Set To Clear Retirees N62.83b shortfall

The Federal Government has began a process aimed at ending delays in payment of retirement benefits of government retirees.

Only contributors will benefit from pension scheme

Those to benefits retirees who transited to the Contributory Pension Scheme (CPS) before retirement.

President Muhammadu Buhari has directed the Minister of Finance, Budget and National Planning, Zainab Ahmed, to appropriate it.

The Minister was also directed to release in full N62.83 billion to clear three years backlog of accrued pension rights.

President’s Chief of Staff, Abba Kyari, had directed the Budget office of the Federation to include N62.83 billion in the next three years budgets.

Buhari explained that the budget would  settle the outstanding accrued pension rights of Federal Government employees from 2020-2023.

The President further directed the Finance Minister to ensure that the funds are fully released upon Appropriation Bills passage.

He also directed the Minister to ensure that adequate provisions are made in the annual Appropriation for accrued pension rights.

FG to clear N62.83b shortfall

“The development is meant to clear the shortfall of N62.83 billion created in the 2017 budget for pension rights.

“The shortfall resulted in a backlog of unpaid retirement benefits of Federal Government retirees under the CPS for 11 months.

“It’s delay contradicts the 2014 Pension Reform Act. The Act  provides that if an employee retires at age 50 or more he access the retirement benefits.

“The Act says if employees retire before age 50 due to mental or physical incapacity, he can access his  RSA.

“But if an employee loses his job or retires before age 50, he will not access the RSA until after six months.

“Attempts by the National Pension Commission (PenCom) to capture the shortfall in previous budgets have been unsuccessful.

“But it appears that the affected retirees now have cause to smile with the latest Presidential directive.

N112.06b PenCom cut to N110.19b in 2018

For instance, it was gathered that in 2018, PenCom submitted N112.06 billion to the Budget Office. This was cut to N110.19 billion, making it impossible to clear the shortfall of N62.83 billion created in 2017 budget.

“Accrued right refers to money the Federal Government owes its workers in service before Pension Reform Act 2004.

“This means that there are two components to benefits paid to Federal Government retirees who transited to the CPS. The contributions accumulated in their RSAs and the retirees’ accrued pension rights earned before they transited to the CPS.

“For a FG retiree to have access to his RSA, the Federal Government must pay the accrued rights. And same is with the contributed savings in the RSA before access is granted to the retiree.

“Put simply, accrued rights are the benefits which the workers who had worked for the government prior to 2004 are entitled to.

In addition to the retirees’ contributions from 2004 to date, the FG must pay the retirees their accrued rights.”


Related posts

China to Finance Deal Of $2.5b In NNPC – GMD Kyari


Global Funds Expanding Into Massive Chinese Investment Market


GTBank Maintains Steady Growth, Posts N58.2b Profit In Q1


Leave a Comment