By Rosemary Iwunze
Experts in the pension industry have called on the Federal Government to promptly conclude the payment of the 2.5 per cent differential in pension contributions to Federal Civil Service retirees and employees.
The experts argue that the N5 billion released by the FG last week to settle the differential for only 2019 and 2020 is commendable but not good enough as the backlog started from 2014.
It will be recalled that the National Pension Commission, PenCom, disbursed a total of N5 billion last week for payment of the 2.5 per cent differential in the rate of employer pension contribution for Federal Civil Service retirees and employees.
This is in line with the Pension Reform Act where minimum pension contribution for employers was increased from 7.5 per cent to 10 per cent.
However, the federal government failed to implement it all along but continued to remit 7.5 per cent for its employees.
The Commission, however, stated that the payment is from 2019 to December 2020, while indicating that the backlog will be cleared at an unspecified later date.
The experts however noted that concluding the payment in record time will aid in the fight against corruption in the public service.
Speaking to Vanguard on the issue, Director, Centre for Pension Rights Advocacy, Mr Ivor Takor said that the affected workers have suffered tremendously as a result of the initial non-compliance by the Federal Government with the provisions of PRA 2014.
Takor said: “The approval of the President is a significant development that has resolved the challenges in the administration of the Contributory Pension Scheme, CPS, as it affects FGN employees of MDAs that have lingered since 2014. It is very welcome news to retirees, their immediate families and families of deceased federal civil servants. These categories of citizens have suffered tremendously as a result of the non-compliance by the Federal Government with the provisions of PRA 2014.
“The non compliance with the PRA 2014, also has unintended outcomes. One of them being that, it has unwittingly, rewind backward, the fight against corruption in the public service. Federal public servants, who see their colleagues retiring and staying for upward of one year without retirement benefits, may be tempted to look for their pension upfront, through fraudulent practices, while still in service thereby compounding the already endemic corruption crisis in the public service.
“The disbursement of N5 billion as part payment is commendable, however FG must ensure that the total backlog is cleared in record time to give its workers a sense of belonging.”
Also speaking to Vanguard, another pension expert said: “We hope that the Presidency, the Office of the Secretary to the Government of the Federation; Federal Ministry of Finance; Budget Office of the Federation; the Office of the Accountant General of the Federation; and the National Assembly will not allow federal pensioners to travel this route again and the labeling of the administration as being insensitive to the welfare and plight of senior citizens of this country.
“This administration can only do this if the backlog in the 2.5 per cent differential in pension contributions is settled in due course.”