The Federal Government’s liability on accrued pension to its employees has risen to about N67 billion, the Head, Research and Corporate Strategy, National Pension Commission (PenCom), Dr. Farouk Aminu, has said.
He spoke at a retreat organized by Pension Fund Operators Association of Nigeria (PenOp) for reporters in Lagos at the weekend.
Farouk said the Commission’s inability to pay the pensions of the Federal Government’s retirees started from January 2014 when PenCom’s budget was cut. He said the last payment by the Federal Government to retirees was in June, last year.
He also said the problem became compounded this year after the National Assembly reduced pension budget in the year, saying the Federal Government was working to offset the liabilities through the supplementary budget it planned to submit to the National Assembly. He said the law requires the Debt Management Office (DMO) to provide the money by issuing bonds.
Aminu said: “Some retirees have not been paid pension from 2017 till date largely because we don’t have the accrued pension to pay them. You will observe that we have been having problems with the bond for payment on accrued benefits. The Debt Management Office was given the responsibility to issue bonds that will cover retirement benefits that accrued under the old pension scheme. The new provision in the law now says, that DMO should be providing the money.
“It is not that the Federal Government has not been providing the money, but it is not good enough. We go round every year to do enrolment of people retiring in a year’s time, we capture their information and calculate their accrued benefits and then we advise government,” he said, adding that this enables government to make provision in the next year’s budget. However, the government will not pay accrued benefits until somebody retires, so they release them monthly.
Continuing, he said: “For instance, if we need like N60 billion, they divide the N60 billion by 12 and give us N5billion monthly. However, the N5 billion was again slashed by half. So, they were giving us N2.5 billion from January 2014 and by the end of 2014, we were only able to pay till June 2014.
‘‘Since then, we are yet to recover. We have also not been receiving the accrued benefits because the National Assembly just passed the budget in June and signed in July. So, it is when we are able to get these monies that we will be able to pay.