Operators of the Contributory Pension Scheme have identified the percentage of lump sum taken by retirees as one of the reasons why some retirees could not benefit from the recent increase in pension payment.
This, they said, was also why there were discrepancies in the amount added to the pensions of different retirees that benefited from the pay rise. In December, the National Pension Commission had ordered the Pension Fund Administrators to raise pensions of programmed withdrawal retirees.
But findings revealed that many retirees had been rejecting the recent pay rise and refusing to sign to accept the increase offered to them by the operators on the ground that the increase was very low and insignificant.
But operators have said the pension pay was a function of what retirees had taken as lump sum in the first place, because they were paid based on the balance available in their Retirement Savings Accounts.
One of the operators said when PenCom raised pensions of retirees of the Nigeria Police Force in June last year, 60 per cent of all police retirees got some increment between five to 120 per cent over what they were earning.
According to him, “That element of lump sum came in to explain the discrepancy, assuming you have N10m and have taken N6m, leaving N4m so the increase will not be the same with the person that took N4m and left N6m,” he said.
But the fact that there was an initiative in the industry to revise this showed there was room for improvement and it would continue to improve, the operators said.