Lack of prompt payment of pension accrued rights by the federal government is adversely affecting the smooth running of the Contributory Pension Scheme, CPS, a pension expert has said.
According to findings, federal government unpaid pension accrued rights for the period covering May 2017 to April 2018 was about N97.55 billion. While total accrued rights being owed pensioners since the commencement of the CPS, is over N300 billion.
Accrued rights are largely entitlement of workers before the advent of the private sector-driven Contributory Pension Scheme. It is a term used to describe what the government owes its workers who have been in service before the commencement of the Pension Reform Act, 2004 (Reviewed in 2014).
Mr. Paddy Ezeala of Premium Pension Limited said that late payment of accrued rights to retiring or retired workers by the various tiers of government renders pension administration cumbersome or even impossible, “The major challenge now is that as a measure to ensure that the government settles the ever mounting backlog of accrued rights, Premium Pension Limited, are not allowed to grant access to Retirement Savings Accounts, RSAs, until the government releases accrued rights.
‘‘This implies that in the CPS, government retirees can only get their entitlement when their accrued rights are released by the government. This is because accrued rights have to be lumped into Retirement Savings Accounts (RSAs) before lump sum and programmed withdrawals could be worked out for retirees.
‘‘With the successful promulgation and review of the necessary pension laws in the country, a different law to enforce compliance at all levels in the public and private sectors might be necessary. Moral suasion has not worked,” he said.