Retirees To Smile As PenCom Raises Pension Bonds To Clear N400bn Arrears

The National Pension Commission (PenCom) has made plans  to raise pension bonds through the Debt Management Office (DMO) to clear the pension arrears of federal retirees.

Recall that the payment of pension has been an issue for decades until  recently.

Since the coming of the President Muhammadu Buhari administration, pension payments to retired civil servants have become a priority.

But despite the progress made there is still a lot to be done to make life more comfortable for the pensioners.

In a recent interview with the Head of Corporate Communications of PenCom, Peter Aghahowa , he disclosed that the government only remits funds monthly but had not been able to meet up with the adequate and regular payment of accrued pension rights.

According to the Chairman, Senate Committee on Establishment and Public Service, Ibrahim Shekarau, the government currently owes its retirees over N400bn accrued pension rights.

The Federal Government had directed the Minister of Finance, Budget and National Planning, Zainab Ahmed, to appropriate and release N62.83bn to clear the backlog of accrued pension rights of retirees  under the CPS in the next three years.

But Nigerian retirees had expressed worries that many of them would have died in poverty before the end of the three-year period.

However PenCom in seeking an end to the lingering arrears through the issuance of pension bonds have been engaging the relevant authorities to ensure funding of the outstanding accrued right liabilities.

The acting Director-General, PenCom, Aisha Dahir-Umar had noted that a submission was made to the federal government to consider issuance of bond through the DMO to fund the arrears as an alternative to budgetary allocations.

Following this submission, the commission has been in talks with the debt office on how to raise the pension bonds to clear the pension arrears.

“While the discussion is still ongoing, the Federal Government said some funds should be released over a period of time.

“But as the funds have not been released, we are still trying to see the possibility of raising the pension bonds to clear the backlog.”

“Section 39 (2) of the Pension Reform Act 2014 mandates the Federal Government to pay into the Retirement Benefits Bond Redemption Fund Account an amount not less than five per cent of the total monthly wage bill payable to employees in the public service of the federation towards the redemption of the accrued pension right of FGN retirees.

“However, in the last five years, budgetary funding/releases had not been regular and adequate for the payment of outstanding accrued pension rights as a result of decline in government revenue,”  PenCom stated