FG To Approve N4bn Pension Money For Professors, Perm Secs
The Federal Government is set to release N4bn to kick-start the payment of full salaries as minimum pensions for some categories of retirees under the Contributory Pension Scheme as mandated by the Pension Reform Act 2014.
Some retired professors and public office holders under the Contributory Pension Scheme who are not earning monthly pensions equivalent to their last salaries while in active service will soon start earning their last salaries as monthly pensions, investigation has revealed.
A senior official of the National Pension Commission, who disclosed this to our correspondent, said that PenCom had finished work on the guidelines to commence the payment as stipulated by the Pension Reform Act 2014.
He said, “We have done the budget and we are waiting for the government to release the money. We need just N4bn to pay them including their arrears.”
He said the Federal Government was already paying N4bn on a monthly basis for accrued rights and had also raised the monthly payment for the accumulated arrears of retirees to N14bn.
While explaining how the minimum pension would work for the beneficiaries, he said, “If the balance in their Retirement Savings Accounts is enough to pay them their last full salaries as monthly pensions, then the government will not intervene.
“But the government will come in and pay the shortfalls for those whose RSAs’ balance is not enough to pay them their last full salaries as pensions.”
For example, he added, “If a Permanent Secretary earned N1m as his last salary and his RSA can only pay him N400,000 a month, the government will provide the N600,000 shortfall so that the Permanent Secretary will get his full salary at retirement as his pension. The N400, 000 will be from his RSA.”
Immediately the government release the money, he said, PenCom would start the payment.
Under Section 2 of the guidelines for the administration of retirement benefits of professors and some categories of political appointees by PenCom, professors, who will be entitled to pensions at the rate equivalent to their annual salaries upon retirement, must be academic staff who retired as professors after serving continuously up to the retirement age of 70 years in a university recognised by the National Universities Commission; or must have served a minimum of 20 years as a professor in a university recognised by the NUC and retired before attaining the age of 70 years.
Political appointees covered by the guidelines are Heads of Civil Service of the Federation and Permanent Secretaries appointed by the President for the Federal Government and the Federal Capital Territory; and by the governors for state Ministries, Departments and Agencies, and are subject to retirement upon attaining the prescribed retirement age or length of service.
For political appointees such as Heads of Service and Permanent Secretaries, the guidelines specified that they must have been appointed from the Civil Service of the Federation or state civil service commissions with a minimum of 20 years of pensionable service.
PenCom noted that prior to the enactment of the Pension Reform Act, retiring Heads of Service of the Federation and Permanent Secretaries were entitled to receive 100 per cent of their annual total emoluments as pension for life.
It added that the Universities Miscellaneous Provisions (Amendment) Act, 2012 provided that retiring professors would be entitled to pension at the rate equivalent to their annual salaries for life.
In recognition of the above provisions, Section 6(2) of the PRA 2014 mandates PenCom to issue guidelines to regulate the administration of retirement benefits of professors covered under the UMPAA 2012 and the category of political appointees entitled by virtue of their terms and conditions of employment to retire with full benefits provided that any shortfall shall be funded from budgetary allocations by the employers.
It added that the shortfall in the RSAs and the accrued rights of the eligible professors and political appointees would be funded from the Federal Government’s retirement benefit bond redemption fund account maintained by the Central Bank of Nigeria, which would be redeemed into their RSAs.
In the case of the states that have joined the CPS, it stated that the accrued rights of professors and political appointees would be funded from the state governments’ retirement benefit bond redemption fund, and that the employer or employee pension contributions should be deducted from the Consolidated Revenue Fund of the Federation or states and remitted to their RSAs.
According to the guidelines, in the event that the balance in the RSA runs out while the professor or political appointee is still alive, the employer shall bear the payment of the full retirement benefits.
PenCom stated that the provisions of the guidelines would apply to eligible professors and political appointees in the federal, FCT and states’ civil service.