FG Owes N494.12bn in Pension—PenCom

By Adedapo Adesanya 

The National Pension Commission (PenCom) has disclosed that the federal government’s arrears of pension liabilities as at the end of the year 2019 totalled N494.12 billion.

This was made known by the Acting Director-General of the commission, Mrs Aisha Umar-Dahir, at the public hearing organised by the House of Representatives committee on pensions on the non-remittance of pensions by employers.

She gave the breakdown of the pension liabilities as N72.14 billion for 2017 and 2018 shortfalls of accrued pension rights and N246.06 billion for 15 percent and 33 percent pension increases.

She further noted that the liabilities included N4.5 billion for shortfalls of the pension entitlements of the head of service, permanent secretaries and professors, N30.13 billion for pension protection fund/minimum pension guarantee as well as N141.3 billion for 3 percent increase in employer/employee pension contribution plus 2 percent penalty.

The acting DG further noted that treasury-funded federal government’s ministries, departments, and agencies (MDAs) under the Contributory Pension Scheme (CPS), are yet to receive their retirement benefits due to delay in payment of accrued pension rights by the federal government.

She also disclosed that out of the 957 Federal Government MDAs under the CPS, only 112 self-funded MDAs have implemented the new minimum contribution rate of 10 percent for their employer and 8 percent for the employee, making it 18 percent of an employee’s monthly emolument.

According to her, 854 other treasury-funded MDAs are still implementing the old contribution rate of 15 percent creating a backlog of 3 percent and 2 percent that must be paid as penalty.

The PenCom Chief then appealed to lawmakers on the consistent provision in budgets to clear the liabilities as well as floating a bond through the Debt Management Office (DMO) to fund accrued rights of Federal Government retirees’ accrued rights.

In his remarks, the Chairman of House of Representatives committee on pensions, Hon. Kabiru Usman Rurun (APC Zamfara Consistuencies), said the public hearing was convened to find solutions to the problems confronting the contributory pension scheme.

He noted that the National Assembly was concerned with alleged mismanagement of pension funds and ill-treatment of retirees.