The Nigerian Senate has proposed, in a Bill to amend the Pension Reform Act (PRA), that retirees should receive a Lump sum payment of 75% of their pension contributions when they reach retirement age. The proposal was made when the red chamber was debating a bill aimed at providing relief to Nigerian pensioners in hardship.
The National Pension Commission (PenCom) and Pension Fund Administrators (PFA) are currently empowered under the Act, which was signed into law in 2004 and revised in 2014, to pay retirees a minimum of 25% lump sum before calculating the amount to pay them on a monthly basis as pension.
“Pension Reform Act 2014 (Amendment), 2022” was the title of the bill that passed the second reading.
Senator Aliyu Wamakko sponsored the proposed legislation (Sokoto North).
According to Aliyu Wamakko (Sokoto North) who sponsored the bill, it is aimed at adjusting the Pension Reform Act of 2014 by establishing a definite and appropriate percentage that a retiree can withdraw from his or her retirement savings accounts.
He said the bill’s provisions aimed to “give assistance to seniors in the event of a delay or other difficulty in withdrawing their money from a retirement savings account.”
He bemoaned the fact that Nigerian retirees were unable to obtain their benefits following their service, causing them pain and, in many cases, premature death.
Despite the modifications to the Pension Act, he stated that the legislation has failed to fulfill its goal of resolving the country’s chronic pension dilemma.
“Suffice to say, the pension issue in Nigeria has more or less grown into a monster that has resisted all efforts by successive governments to curb it,” he said.
The bill was referred to the Committee on Establishment and Public Service Matters by Senate President Ahmad Lawan and given four weeks to submit its report.