The National Pension Commission has
introduced guidelines that will enable some categories of retirees under the
Contributory Pension Scheme to earn their last full salaries like their
counterparts in the old Defined Benefits Pension Scheme, NIKE POPOOLA writes
The National Pension Commission has set out
modalities for the administration of retirement benefits of professors and
public office holders to earn their last salaries as pension under the
Contributory Pension Scheme.
The details were contained in the guidelines for
the administration of retirement benefits of professors and some categories of
political appointees obtained by our correspondent.
Under section two of the guidelines, professors,
who are to be entitled to pensions at a 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 who are
appointed by the President, for the Federal Government and 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, 2004, 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.
The commission is also working on the
implementation of minimum pensions for retirees with low monthly stipends under
the CPS.
The Pension Reform Act, 2014 provides that PenCom
should establish and maintain a fund to be known as the Pension Protection Fund
in respect of the guarantee minimum pension.
According to the Act, funding of the minimum
guaranteed pension will be partly obtained from an annual subvention of one per
cent of the total monthly wage bill payable to employees in the public service
of the federation and returns from pension fund investments.
It will also be funded from the annual pension
protection levy paid by PenCom and all licensed pension operators at a rate to
be determined by the commission from time to time.
The Chairman, Pension Fund Operators Association
of Nigeria, Mr. Eguarekhide Longe, said the operators were ordered to pay three
per cent of their management fees, while PenCom would also pay some fees to
fund the minimum pension scheme.
Operators in the CPS had proposed a minimum
pension payment of N14,400 to retirees as contained in the draft guidelines.
The draft guidelines on minimum pension, sent to
PenCom by the operators, state that only workers who have contributed for a
minimum of 15 years into their Retirement Savings Accounts will enjoy the
minimum pension stipend.
The guidelines added that informal sector and
casual workers must have contributed to their RSAs for 120 and 135 months,
respectively before they can enjoy this privilege.
The initiative, according to the operators, will
bring an end to the situation where retirees are paid abysmally low pensions or
when the balances in their RSAs are very small, which makes them unable to
receive stipends.
Post A Comment: