In an effort to address outstanding pension liabilities, death benefits, and gratuities, the Kaduna State Government has released a sum of ₦920 million. The Executive Secretary of Kaduna State Pension Bureau, Prof. Salamatu Isah, made this announcement in a statement issued in Kaduna.
According to the statement, the amount released will cover batch 54 of state and local government retirees as well as death benefits. The payment will be made under the old ”Defined Benefit Scheme (DBS)”.
Prof. Isah further disclosed that ₦400 million would be disbursed to state pensioners and retired civil servants, while their counterparts from the local government service would receive ₦520 million.
The payment under the Contributory Pension Scheme (CPS) will be made by the Pension Funds Administrators (PFAs). Prof. Isah explained that the payment, which is known as Accrued Rights, is the retirees’ entitlements paid to PFAs instead of individual beneficiaries.
The DBS was the pension scheme that was in effect in Nigeria until 2007 when it was replaced with the CPS as stipulated in the Pension Reform Act (PFA) 2004 and 2014. Under the DBS, the total pension obligation is borne by the government as against the CPS, where the accumulated pension at retirement is based on a pension plan in which an employer/employee contributes in varying percentages to build a retirement fund for an individual.
The CPS allows the pension fund to exist from the onset, and payments can be made as and when due, unlike the DBS, which is wholly dependent on the government treasury for funding.
The release of ₦920 million by the Kaduna State Government is expected to bring relief to pensioners and their families who have been waiting for their entitlements.