PenCom plans living wage for retired low-income earners

After the Federal Government approved a N758 billion pension bond to pay off all outstanding liabilities under the Contributory Pension Scheme, the National Pension Commission revealed intentions to provide a livable salary for retired low-income earners.

At a press conference held in Abuja on Thursday following the Quarterly PenCom/Operators Consultative Forum, PenCom Director-General Omolola Oloworaran revealed this information.

"The approval of a N758bn Federal Government of Nigeria Bond to fully cover outstanding pension liabilities under the Contributory Pension Scheme has achieved a key milestone in our nation's pension administration," she added.

She characterized the bond as a significant move by President Bola Tinubu to ensure that pensioners receive their benefits promptly and to rebuild trust in the pension system.

According to her, N107 billion from the bond was given to the Pension Protection Fund, which would help low-income retirees who might not have saved enough money to support themselves in retirement.

She says this is a big step to improve pension security because it is the first time the Federal Government is making a direct contribution to the PPF.

She clarified that the N758 billion bond would also pay off long-standing debts, such as N253 billion for accrued pension rights owed to retirees from Ministries, Departments, and Agencies that get funding from the Treasury.

Over 250,000 pensioners would benefit from N388 billion, she claimed, which had been set aside to settle overdue pension increases going back to 2007.

In order to ensure that qualified retirees in the academic sector receive their full salary upon retirement in accordance with pension reforms, Oloworaran noted that N11 billion had been set aside to address pension gaps for university teachers.

"This historic bond settles all accrued pension obligations, covering: Accrued Pension Rights: To make up for the delays brought on by earlier financial shortages, N253 billion has been set aside to settle unpaid pensions for retirees of FGN Treasury-funded MDAs. In order to guarantee automated and prompt payments, accruing pension rights will now be covered by the monthly personnel cost general warrant.
"Pension Rises" N388 billion has been made available since 2007 to pay pension increases that have been overdue for almost 20 years. Benefiting more than 250,000 pensioners, this long-overdue entitlement demonstrates the administration's dedication to maintaining pensions' equity and responsiveness to changing economic conditions.

Pension Protection Fund: To guarantee that pensioners, especially those with modest incomes, receive a livable pay in retirement, the FGN is making its first N107 billion contribution to the PPF. This is a significant step in enhancing the CPS's financial security for all retirees.

"University Professors' Pension Shortfall: N11 billion has been set aside to bridge the funding shortfalls that previously prevented the provision's full implementation, enabling qualified university professors to retire on their full salaries."
Noting that the intervention had placed the Contributory Pension Scheme on a sustainable road, she praised Tinubu for what she called a bold and decisive step in pension administration.

She promised that PenCom will collaborate with all pertinent parties to guarantee the bond's seamless issuance and the timely distribution of pension benefits.

According to her, settling pension obligations would benefit the economy more broadly by bolstering the financial system, increasing investment in the pension sector, and improving economic stability.

She stated that now that the backlog has been cleared, PenCom will concentrate on growing the Micro Pension Plan, which aims to give workers in the unorganized sector structured retirement savings.

Oloworaran expressed gratitude to Tinubu for making pension reform a top priority and to Wale Edun, the Finance Minister and Coordinating Minister of the Economy, for helping to make the proposal possible.

"With this action, the CPS can now fully deliver on its responsibility of ensuring financial security and dignity for retirees," she said, characterizing the development as a turning moment for the pension market.