PenCom Commences Payment Of 2.5% Pension Differentials To Retirees

The National Pension Commission (PenCom) has revealed that it had started the payment of 2.5% differentials of 2004 and 2014 specified by the Pension Reform Act (PRA) to retirees.

This follows the increase from 7.5% to 10% for the contribution stipulated in the 2014 PRA as amended.

CityNews Nigeria learnt this disclosure was made by the Head, Contributory and Bond Redemption Department for PenCom, Mr Saleem Abdulrahman, at the 2021 Journalist Workshop organised by the Commission in Lagos with the theme: “Positioning the Pension Industry in the Post COVID Era,” on Monday.

According to the News Agency of Nigeria, Abdulrahman said the beneficiaries were retirees between 2019 and 2020 of the Federal Government Treasury Funded Ministries, Departments and Agencies (MDAs).

Abdulrahman explained that the commission had also begun computing the details of retirees between July 1, 2014, to Dec. 2018 and would pay them soon.

He said, “Some of the retirees may likely get additional lump sum or enhanced annuity or programmed withdrawal. We have also begun the computation of the active employees to enable payment.’’

What you should know

The Federal Government, earlier in July, approved the payments of outstanding pension liabilities under the Contributory Pension Scheme (CPS) through a Presidential order.

In a communication to all its stakeholders, particularly retirees of Treasury-funded Federal Ministries, Departments and Agencies (MDAs), PenCom said that President Buhari’s approval of the commission’s submission was on the payment of some critical aspects of the outstanding pension liabilities of the Federal Government under the CPS specifically.

The 2014 PRA as amended established a Contributory Pension Scheme (CPS) whereby the employers were required to contribute 10% of the employees’ salary to the scheme monthly.

The 10% minimum contribution by employers is an increase of 2.5% over the 7.5% contribution stipulated by the repealed 2004 PRA.

The Act also mandated employees to contribute a minimum of 8% to the scheme monthly.