By Victor Ahiuma- Young
RETIREMENT Savings Account, RSA, holders, will wait a longer time to be able to access their savings to pay for their medical needs as the Pension Reform Act, PRA, has no provision for such.
Speaking to Pension and You, Secretary/Legal Adviser, National Pension Commission, PenCom, Mr Muhammed Sani Muhammed, said while the commission sympathised with RSA holders who wanted to access their RSA to address their medical needs, there was nothing the commission could do about it.
According to him: “I share the concerns of many people that have this feeling; that goes to show us that contributory pension reform is working, because before we reformed, people didn’t have a reference point where you have a balance in an account that is yours that you make reference to.
You know pension is just one out of so many social security networks and health insurance is another. I think that it is something the pension industry will look at.
As at today, the law does not allow you to access pension money to take care of your health because the pension money is pension and it is not for health insurance. But we believe since we are evolving as a country, probably as we move further, we will see how best to do it because if you recall, before 2014 there was no legal allowance for accessing a percentage to do a mortgage, now 2014 says you can do that, now that has opened the window.
“So, as we move on, if we look at the finances and then the equation of the infrastructure to see whether or not we will not be undermining the very original objective of the pension reform which is to pay pensions upon retirement, then probably that could be looked at. I share the concern that you have to live up to the time that you retire so you can only take pensions when you live up to that time, but it is not yet possible legally to engage in that, probably in the future.”
On why retired professors, heads of service and permanent secretaries, are paid 100 per cent lump sum, he said: “Well if you recall, for the professors, I feel it was the outcome of the negotiation between Academic Staff Union of Universities, ASUU, and the Federal Government and a law was enacted in that regard.
That is the Universities Miscellaneous Provisions Act 2012, so what the 2014 Pension Reform Act did was merely to recognise the provisions of the Universities Miscellaneous Provisions Act 2012, it is part of the terms and conditions of employment of professors that when they retire, they retire with their full pay as pensions. But the pension law went further to give a cover that they are still under the contributory pension scheme.
However, the employer should provide the funding gap, if at the end of the day the balance in the RSA is not enough to provide that 100 per cent of salary as pension, then it will be computed, look at the gap, the Federal Government would be advised and the Federal Government is supposed to make budgetary provision to pay for them. That is what the law says, and the same thing goes to the permanent secretaries as part of their conditions of employment.
That is why if you look at 2014 Act, it merely says that those political appointees who by virtue of the terms and conditions of their employment, are entitled to take their full salary as pensions then they should do that. It means that the Pension Reform Act is not changing terms and conditions of employment.
What it is concerned about is that whatever you state as the terms and conditions, then the employer should be able to provide that. So we would say it should be done; that is exactly what we have advised the Federal Government.”