The Federal Government of Nigeria has initiated the computation of accrued pensions for federal civil servants to expedite the payment process for retirees, as revealed by a memo from the Office of the Head of Civil Service of the Federation. This initiative, in collaboration with the Ministry of Finance, targets employees hired on or before June 30, 2004.
The memo, obtained by The PUNCH on Tuesday in Abuja, highlights the government’s intent to plan ahead for the timely disbursement of retirement entitlements. It states that delays in pension payments are often due to the late release of accrued rights under the old Defined Benefit Scheme. To address this, data collection of eligible officers is underway.
“To enable the government to plan towards the early release of the accrued rights, there is a need to harvest the data of the officers who are entitled to the rights,” the memo explained. It emphasized that completing the required forms is mandatory for these officers to receive their accrued pension rights upon retirement.
This action follows a period of significant delays in pension fund releases. The Federal Government failed to disburse funds for accrued pension rights in the first half of 2024, continuing a pattern from 2023, where no funds were released despite budgetary allocations. The last significant release was in the first quarter of 2023, covering outstanding payments from 2022.
In addition to the immediate pension payment concerns, the Federal Government has not implemented its policy on the upward review of pension amounts under the Contributory Pension Scheme (CPS) for 15 years. The law mandates pension reviews every five years or in conjunction with federal civil service salary reviews, whichever is earlier. Despite this, no adjustments have been made since the CPS’s inception in 2004.
Currently, the government’s debt to retirees on accrued pension rights stands at approximately N230 billion for the past 16 months. Pensioner groups have increasingly voiced their dissatisfaction, suggesting a boycott of investing pension assets in government securities due to the government’s failure to comply with pension payment regulations.
The National Pension Commission reported that in 2021, the government released N100.2 billion for accrued rights, bringing the total release since the scheme’s inception to N980.18 billion. In March 2022, an additional N14.92 billion was released. However, the Pension Fund Operators Association of Nigeria noted that the last funds released were up to February 2023, with no subsequent payments.
This new initiative by the Federal Government aims to rectify these issues and ensure that retirees receive their due pensions promptly, addressing long-standing concerns about the management and disbursement of pension funds.
