The National Pension Commission (PenCom) on Monday said it had commenced payment of the 2.5 percent differentials of 2004 and 2014 pension contributions specified by the Pension Reform Act (PRA) to retirees.

The Director-General, PenCom, Mrs. Aisha Dahir-Umar, said this at the 2021 Journalist Workshop organized by the Commission in Lagos with the theme: “Positioning the Pension Industry in the Post COVID Era.”

Represented by Mr. Peter Aghahowa, Head, Corporate Communications, PenCom, Dahir-Umar said the payment of 2.5 percent differential in the rate of employer’s pension contribution for FGN retirees and employees was approved by President Muhammadu Buhari.

Dahir-Umar explained that the differential resulted from the increase in the minimum pension contribution for employers from 7.5 percent to 10 percent, in line with Section 4(1) of the Pension Reform Act (PRA) 2004.

“These payments would undoubtedly boost the RSA balances of the beneficiaries towards better retirement benefits.

“The settlement of these outstanding accrued pension rights of verified and enrolled FGN retirees would result in reversing a major challenge that has lingered since 2014.

“Also the commencement of payment of the reviewed monthly pension contribution rate by the Federal Government is another significant step in ensuring compliance with the PRA 2014,” she noted.

Mr. Saleem Abdulrahman, Head, Contribution and Bond Redemption Department, PenCom said the beneficiaries were retirees between 2019 and 2020 of the Federal Government Treasury Funded Ministries, Departments, and Agencies (MDA’s).

“Some of the retirees may likely get additional lumpsum or enhanced annuity or programmed withdrawal.

“We have also begun the computation of the active employees to enable payment, ” Abdulrahman said.

He added that the commission had also begun computing the details of retirees between July 1, 2014, to Dec. 2018 and would pay them soon.

PenCom seeks EFCC’s support in tackling Pension fraud

2014 PRA as amended established a Contributory Pension Scheme (CPS) whereby the employers were required to contribute 10 percent of the employees’ salary to the scheme monthly.

The 10 percent minimum contribution by employers is an increase of 2.5 percent over the 7.5 percent contribution stipulated by the repealed 2004 PRA.

The Act also mandated employees to contribute a minimum of 8 percent to the scheme monthly.