The National Pension Commission (PenCom) announced on Monday that it had begun paying pensioners the 2.5 percent differentials mandated by the Pension Reform Act (PRA) 2014.
Aisha Dahir-Umar, Director General of PenCom, stated this at the Commission’s 2021 Journalist Workshop in Lagos, with the theme “Positioning the Pension Industry in the Post COVID Era.”
Dahir-Umar, represented by Peter Aghahowa, Head, Corporate Communications, PenCom, stated that President Muhammadu Buhari approved the payment of a 2.5 percent differential in the rate of employer’s pension contribution for FGN retirees and employees.
According to Dahir-Umar, the difference was caused by an increase in the minimum pension contribution for employers from 7.5% to 10% in accordance with Section 4(1) of the Pension Reform Act (PRA) 2004.
“These payments would undoubtedly boost the beneficiaries’ RSA balances in the direction of better retirement benefits.
“The resolution of these outstanding accumulated pension entitlements of verified and enrolled FGN retirees would result in the reversal of a key issue that has persisted since 2014.”
“Also the commencement of payment of the reviewed monthly pension contribution rate by the Federal Government is another significant step in ensuring compliance with the PRA 2014,” she noted.
Saleem Abdulrahman, Head, Contribution and Bond Redemption Department, PenCom said the beneficiaries were retirees between 2019 and 2020 of the Federal Government Treasury Funded Ministries, Departments and Agencies (MDA’s).
He also stated that the commission has begun compiling information on retirees from July 1, 2014 to December 31, 2018, and that they will be paid soon.
The 2014 PRA as modified introduced a Contributory Pension Scheme (CPS) in which companies were required to contribute 10% of their employees’ salaries to the scheme on a monthly basis.
Employers’ minimum payment of 10% is a 2.5 percent increase above the 7.5 percent contribution mandated by the repealed 2004 PRA.
The Act also requires employees to contribute a minimum of 8% to the scheme on a monthly basis.
Source: Premium Times