Nigeria’s Liabilities to Retirees Under Contributory Pension Scheme Hits N314.58bn

 The National Pension Commission (PenCom) has recently disclosed that the total liability of the federal government from the implementation of pension increases in 2007, 2010, and the 2019 consequential adjustment for retirees under the Contributory Pension Scheme (CPS) stood at N314.58 billion in 2023.

PenCom has further sought approval for an increase in pension rates for pensioners under the Defined Benefits Scheme (DBS) following the recent increase in salaries for employees of treasury-funded Ministries, Departments and Agencies (MDAs).

The commission seeks to raise the new pension rates under the DBS by between 20% and 28% in 2024.

The Director General/Chief Executive of PenCom, Aisha Dahir-Umar, conveyed the request for the implementation of the new pension template in a correspondence dated May 3, 2024, to the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun.

While urging the minister to approve the new rates, Dahiru-Umar drew attention to the omission of pensioners under the CPS in the current rates review, which she said was a "cause for serious concern." She added that it would amount to a fundamental breach and denial of their constitutional rights as enshrined in Section 173 (3) of the 1999 Constitution and undermine the pension reform of the federal government. Dahiru-Umar also noted that previously approved pension increases of 15% in 2007 and 33% in 2010, following salary reviews in the public service as well as the consequential adjustment of 2019, were yet to be effected for retirees under the CPS.

She stated that the commission had submitted a letter on the matter dated February 21, 2024, to the Tripartite Committee of the National Salaries, Incomes and Wages Commission (NWSC) on the national minimum wage. She further stated that the fundamental omission of pensioners under the CPS in the current rates review was contrary to both Section 173 (3) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) and Section 15 (4) of the Pension Reform Act (PRA) 2014.

According to her, after the 2004 pension reform, retirement benefits under the CPS consist of both the monthly pension contributions accumulated from the commencement of the scheme in 2004 and the Accrued Pension Rights for past service rendered prior to the commencement of the scheme.