According to the National Pension Commission (PenCom), the federal government has ordered the payment of outstanding pension liabilities under the Contributory Pension Scheme (CPS).
The Contributory Pension Scheme (CPS), established in the Pension Reform Act of 2014, is a mandatory scheme that requires both employees and employers in the public and private sectors to collectively save a minimum of 18% of an employee’s monthly earnings into a Retirement Savings Account (RSA).
According to a PenCom press release, retirees of Treasury-funded Federal Ministries, Departments, and Agencies (MDAs) have been informed that President Muhammadu Buhari has approved PenCom’s submission on the payment of some critical aspects of the Federal Government’s outstanding pension liabilities under the Contributory Pension Scheme.
“Specifically, the President has approved the payment of outstanding accrued pension rights for verified and enrolled retirees of treasury-funded MDAs who retired but have yet to be paid their retirement benefits, as well as the backlog of death benefits claims due to beneficiaries of deceased employees of treasury-funded MDAs,” according to the statement.
“Payment of a 2.5 percent differential in the rate of employer pension contribution for FGN retirees and employees as a result of the increase in the minimum pension contribution for employers from 7.5 percent to 10% in accordance with Section 4(1) of the PRA 2014.” Payments to retirees and current employees would begin in July 2014.”
The commission assured that the federal government will continue to pay the 10% rate of employer pension contribution for its employees, as required by the Pension Reform Act of 2014, ensuring a monthly remittance of at least 18%. (employer 10 percent and employee eight percent).
It also stated that funds had already been made available for the settlement of pension liabilities and that remittances into the affected retirees’ and employees’ various retirement savings accounts (RSAs) are currently being processed.
According to the commission, the affected retirees will be notified in due course by the administrators of their respective pension funds (PFAs).
Source: Premium Times