The Director-General of the National Pension Commission, Ms. Omolola Oloworaran, has announced that retirees will soon receive the benefits of pension increases dating back to 2007.
This development follows the Federal Government’s approval of a ₦758 billion bond aimed at clearing all outstanding pension liabilities under the Contributory Pension Scheme.
This was disclosed by Oloworaran during an interview on the NTA News following stakeholders’ meetings with licensed pension fund administrators.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, stated that the approval permits the Debt Management Office to secure the funds necessary to eliminate the backlog of pension arrears.
According to PenCom, N387.5 billion from the pension bond proceeds will be allocated specifically to cover pension increases that have been pending since 2007.
She said, “This indeed is a significant development in the pension industry. We have N387.5bn, which will be committed to pension increases since 2007. Yes, you heard me right; that was almost two decades ago. Some pension increases have been pending without the government paying for them, but this government under President Bola Tinubu has taken this issue seriously and will be paying all outstanding pension increases from 2007 to date.”
Approximately N253 billion from the pension bond proceeds has been earmarked to settle accrued rights.
“Now, accrued rights are entitlements due to workers who were working with the Federal Government before the inception of the CPS in 2004 and, of course, workers who had three years or more before their retirement.
“What this has done is to enable us to clear the backlog in accrued rights payments. We have been hearing a lot about delayed pension payments in the last few months since I took this role as DG. With this intervention, those delays will no longer happen, and they will be a thing of the past once the bond is issued. Again, N253bn is dedicated to that.
“Then we move to the third category, which is the Pension Protection Fund, which I’m very passionate about. N107bn has been committed to the Pension Protection Fund. It is expected to augment pensions for low-income earners to enable them to earn a living wage. Since the enactment of the law in 2014, this is the first time that the government is contributing to this fund. So, once the bond has been issued and funds disbursed, retirees who currently earn low pensions will have the joy of their pension being augmented through these funds that have been approved.”
Oloworaran reiterated that PenCom remains committed to collaborating with stakeholders to expedite the bond issuance process.
The DG PenCom mentioned that the commission was committed to rebuilding trust in the Contributory Pension Scheme in the country, stating, “The first thing for us is to build trust in the CPS, which has been waning in the last few years because of these outstanding liabilities. This payment allows us to build trust in the CPS and for Nigerians to now understand that this government has the interest of the ordinary Nigerian at heart. This allows us to expand the pension scheme to the informal sector, where we are currently not scratching the surface at all. It will help the informal sector to believe that when they contribute to the scheme, their funds are safe and will be managed effectively by PenCom.
“In addition, we are going to be able to expand the compliance net. This government has shown dedication, and with the support of the president, we will be able to ensure that every employer contributes to the CPS for their employees.”
