The National Pension Commission has revealed that it is working with the Ministry of Finance to ensure prompt payment of retirees’ benefits.
This was revealed by the Director-General of PenCom, Omolola Oloworaran, during an interactive session with the media in Lagos recently.
Responding to a question on accrued rights and the non-payment of retirees’ benefits, the DG projected that the initiative being worked on should come to life before the close of the year.
She said, “I understand that a number of retirees have not been paid and are wondering why we cannot give them what they have contributed, which is a legitimate request. Unfortunately, the law does not allow PenCom to release those funds to them right now. The only thing we can do is follow up with the government to ensure that the accrued rights are paid. Also, there is the argument that if we pay them what they have contributed, the government may not take paying the outstanding seriously and that might linger on for years because once you give pensioners what they have contributed, the agitation would reduce for some time and the government might not feel the heat and treat it as urgent the way they are doing it right now.
“We are looking at a lasting solution going forward. We are working on an initiative with the Ministry of Finance and before the end of the year, that should come to fruition. The first set of people that should be getting paid at all in government should be contributors under the CPS because they have contributed. For me, it is a lasting solution. We are working with the government to ensure that once you are retired, within a month, you should get your benefits and I’m optimistic that we should be able to achieve it.”
Oloworaran revealed that from November 2023 till date, about 18,000 persons have retired and are awaiting their benefits.
Earlier this month, the federal government released the sum of N44bn for payment of accrued rights to its retired workers from March to October 2023.
About the annuitants under African Alliance Insurance Company, the PenCom boss revealed that the Commission had banned the firm from selling annuities to anyone and is working with them to ensure there was no repeat.
“We are glad that they have made the payment now and we want to work with them to ensure that they don’t have this problem again. Right now, we have banned them from selling annuities. Nobody can buy an annuity from African Alliance Insurance again until we are sure that they can meet up with their obligations as of when due. That is it for a start. When we have a lasting solution in place, we will then work with NAICOM to see what penalties we can impose,” she affirmed.
With an annuity, a retiree can pay a lump sum to an insurance company, which it invests in return for a guaranteed income stream.
PenCom DG also reiterated that pension fund administrators would continue to invest in FG securities because it was risk-free and the government had not defaulted on its obligations.
She said,“Pension funds globally form a pool of capital for every nation. Both developed and developing nations like ours always invest in government treasury bills or government bonds. So, there is nothing new that Nigeria is doing. What we are simply doing is investing in federal government securities either through treasury bills, FGN bonds, or any other instrument issued by the government. Yes, it is borrowing, but it is an investment for us, and the returns on investment in government securities at the moment, I believe, top any investments, at least in Nigeria, that I have seen.