The Federal Government has released N11.82 billion pension accrued rights for retirees of Treasury Funded Ministries, Departments & Agencies (MDA) under the Contributory Pension Scheme (CPS.)
The payment BusinessDay confirmed covers Federal Government’s indebtedness on accrued rights up to February 2020.
Accrued rights represent benefits for employees of Treasury Funded MDAs who worked up to June 2004, when the Pension Reform Act was introduced.
Peter Aghahowa, Head, Corporate Communications Department of the National Pension Commission(PenCom) who disclosed the new payment Wednesday expressed appreciation of the Commission to the Federal Government for ensuring that the accrued rights arrears are cleared.
With this payment, employees of the MDAs who retired up to February 2020 could now access their pensions from the different Pension Fund Administrators (PFAs).
The Federal Government also in August 2020 released N14.92 billion for the payment of accrued rights for retirees.
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Session 15 (1)of the Pension Reform Act 2014 provides that “as from 25 June 2004, being the commencement of the Pension Reform Act, 2004, the accrued pension right to retirement benefits of any employee who is already under any pension scheme existing before the commencement of that Act and has over 3 years to retire shall – (a) in the case of employees of the Public Service of the Federation where the scheme is unfunded, be recognized in the form of an amount acknowledged through the issuance of Federal Government Retirement Benefits Bonds by the Debt Management Office in favour of the employees and the bond issued under this subsection shall be redeemed upon the retirement of the employee by section 39 of this Bill and the amount so redeemed shall be added to the balance of the retirement savings account of the employee and applied by the provisions of section 7 of this Bill.
While sub-section (C) provides that “in the case of the employees of the Public Service of the Federation, Federal Capital Territory or in the Private Sector, where the scheme is funded, credit the Retirement Savings accounts of the employees with any funds to which each employee is entitled and in the event of an insufficiency of funds to meet this liability the shortfall shall immediately become a debt of the relevant employee and shall have priority over any other claim.
The objectives of this scheme are to ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory, States, and Local government or the Private Sector receives his retirement benefits as and when due; and to assist improvident individuals by ensuring that they save to cater for their livelihood during old age.
The provisions of this Act shall apply to any employment in the public service of the Federation, the public service of the Federal Capital Territory, the Public Service of the state, the public service of the local governments, and the private sector.
In the case of the Private Sector, the Scheme shall apply to employees who are in the employment of an organization in which there are 3 or more employees.
Notwithstanding the provision of subsection (2) of this section, employees of an organization with less than three employees as well as self-employed persons shall be entitled to participate under the scheme through a micro pension scheme.
