This amounted to about a quarter of the balance in their Retirement savings Accounts with their respective Pension Fund Administrators when they retired.

The PFAs transferred N642.32bn premium to life insurance companies for monthly stipends to the retirees, according to figures obtained by The PUNCH on PenCom’s report on ‘Retirement by annuity in Q1, 2023’.

According to the report, the life insurance companies were paying the annuitants an average monthly stipend of N6.53bn as of the period under review.

In Q1, 2023, PenCom stated in the report that, “A total of 3,505 retirees chose annuity mode of pension payment during the quarter under review.

“A lump sum of N15.23bn was approved for payment to the retirees, while the sum of N26.54m was approved for payment to retiree life annuity providers as premium in return for monthly annuity of N291.80m.”

The Pension Reform Act opened huge business opportunity for the insurance industry by introducing life annuity which underwriters sell to retirees under the CPS.

Under the CPS, retirees have the option to adopt either programmed withdrawal or life annuity retirement option.

Life annuity, according to the Pension Reform Act, is a financial product offered by insurance companies which are regulated by the National Insurance Commission, for a regular income in consideration for the payment of premium from a retiree.

It provides regular pension payments for life as long as the retiree is alive, and it is guaranteed for 10 years in case of death.

NAICOM disclosed in its ‘Bulletin of the insurance market performance’ report for the fourth quarter of 2022 that, “Annuity business contributed gross premium income of about 26.9 per cent to the sector’s premium during the period.

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The upper chamber announced on its Twitter handle on Tuesday that it had passed the bill, although a 2014 federal government white paper rejected the agitation and previous attempts had been turned down by the federal lawmakers.

Under the CPS, both the employee and the employer make contributions towards the employee’s pension — in contrast with the DBS under which all the burden is borne by the government.

This had led to unfunded pensions and pile-up of pension liabilities running into trillions of naira before the Olusegun Obasanjo administration carried out an industry reform in 2004.

Under the bill passed by the senate, the federal government will now be fully responsible for police pensions and this is expected to cost trillions of naira over time.

At the public hearing organised by the senate committee on police affairs on January 20, 2023, the National Pension Commission (PenCom), which regulates the industry, the Pension Fund Operators Association of Nigeria and the Nigeria Labour Congress (NLC) opposed the bill.

Boss Mustapha, who was then secretary to the government of the federation (SGF), wrote to the inspector general of police reminding him that there was an SGF circular Ref. 59149/S.1/C.1/11/266 and dated July 20, 2021 which said the police must be under the CPS and that the directive had not changed.

Mustapha also referred to the White Paper on the report of the Presidential Committee on Restructuring and Rationalization of Federal Government Parastatals, Commissions and Agencies which expressly forbids any government body, apart from the military and the intelligence services, from exiting the CPS.

The national assembly also passed a bill recently to exempt its staff from the CPS.

Former President Muhammadu Buhari assented to on the even of his departure.

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PenCom’s Head of Corporate Communication, Peter Aghahowa, who made this known in a statement in Abuja, said that the commission also informed the public to take note of the directive.

“The general public is hereby informed that all PFAs have been directed to implement the second edition of the pension enhancement exercise for retirees on Programmed Withdrawal mode of retirement

”The pension enhancement is for CPS retirees who have accumulated significant growth in their Retirement Savings Accounts and had retired between July 2007 and December 2017. ”

According to Aghahowa, the retirees referred to above are by this notice advised to contact their respective PFAs to confirm their eligibility and complete requisite documentation.

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Dr Abel Afolayan, NUP President who said this in a statement made available to newsmen on Thursday in Abuja, stressed that the NUP felt the compelling need to put the facts straight as the Federal Government indebtedness to the CPS was over N280 billion.

He said the release of N54 billion could not be said to have cleared the backlog of pension liability, adding the Federal Government had consistently under-appropriated for the CPS over the past few years.

“NUP has it on verified record that whereas the sum N93 billion was needed to service Federal Government’s statutory obligations to the CPS in 2014, only N30.6 billion was approved, resulting in N62.4 billion deficit.

“Whereas N98.7 billion was needed for the year 2015, the budget office only proposed the sum of N60.2 billion to the National Assembly that alone was a shortfall of N38.5billion.

According to him, the year 2016 was worse as N91.9 billion was required, but the budget office proposed only N50 billion to the National Assembly, which also approved it, leaving a deficit of N41.9 billion.

He said that of the N50 billion approved in the 2016 budget, only the sum N18.8 billion or mandates for four months was released and cash-backed.

He added that N31.3 billion or mandate for seven and half months was never cash-backed and released.

According to him, the truth is that approval of payment is not the same as payment.

“It will be good for the minister to tell us when the fund was transferred to the National Pension Commission, and when it will hit pensioners’ accounts.

“Importantly, we are saddened that the Federal Government is claiming to have cleared pension arrears when the Minister did not say a word regarding the over N174 billion owed pensioners who retired under the Defined Benefit Scheme (DBS).”

According to him, does it mean that pensioners under this scheme have finally been condemned to life of eternal hardship, sickness, and untimely death, President Muhammadu Buhari is not only a retiree, but also a kind leader.

“NUP recalls that he bent backwards to release bailout to State governments, which could not pay salaries.

“We call on the President to also extend the same kindness to the federal pensioners among us, whose pension benefits are his primary responsibility.

“There is no doubt that the way retirees are treated would decide whether those in service and the younger generation would cue behind government’s anti-graft war or engage in looting to prepare for life after service,” he said.

Mrs Kemi Adeosun, the Minister of Finance had said in a statement that the Federal Government released the sum of N54 billion to clear liabilities to the CPS from 2014 till date.

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The Minister also announced that the sum of N12.5 billion being outstanding for January, February and March 2017 has been settled based on 2016 appropriation, bringing the tally to over N54 billion.

“Despite conflicting demands for available cash, President Muhammadu Buhari has always expressed concern about the plight of workers and pensioners.

“Consistent with this, we have released N41.5 billion which clears the arrears inherited from the previous administration relating to the period 2013-15 and underpayments in 2016.

“This will bring relief to thousands of our elders who have served and deserve to be paid their entitlements promptly and fully,” Adeosun emphasised.

The N41, 566, 565, 184 released to PENCOM was the outstanding appropriated for the year 2014 and 2016 by the National Assembly for the settlement of the retirement benefits of Federal Government employees.

She explained further that “the amount we paid includes arrears and the impact is that those who retired as far back as 2013, who had been unable to access pension under the contributory scheme due to non payment, will now be paid.”

To avoid future accumulation of pension arrears, Mrs. Adeosun assured that henceforth “the monthly allocation to the PENCOM based on the appropriation of 2017 will regularly be paid along with monthly salaries of Ministries, Departments and Agencies (MDAs).”

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The State Government, through LASPEC has, since the beginning of this administration paid 5,956 retirees from the mainstream Civil Service, Local Government and State Universal Basic Education Board, Teachers Establishment Pensions Office as well as other parastatals and agencies.

The Director-General, LASPEC, Mrs. Folashade Onanuga, who disclosed this during the 37th Retirement Benefit Bond Certificate Presentation Ceremony, held on Wednesday, said that by April 2017, the Contributory Pension Scheme (CPS) would clock 10 years of its commencement in Lagos State.

While stating that activities have been lined up to commemorate the decade of the CPS in the State, Onanuga congratulated the retirees and urged them to spend their money judiciously.

The Assistant Director, Technical, Olawale Otun took the retirees through the various benefit options available under the CPS and urged them to choose the best option in line with their future plans and aspirations.

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Findings by the News Agency of Nigeria (NAN) show that the Federal Government is currently owing its former workers accrued rights from January 2016 till date.

Accrued pension rights is the term used to describe what the Federal Government owes its workers who have been in service before the commencement of the Pension Reform Act, 2004.

All Federal Government workers were “retired” and then reemployed to join the service and their pension funded monthly according to the Pension Reform Act, 2004.

The money the Federal Government now owes its workers before the commencement of the act is recognised in form of an amount acknowledged
through the issuance of Federal Government Retirement Benefits Bonds.

Upon retirement of an employee, the bonds are to be liquidated and added to the balance of the retirement savings account of an employee to get
the total amount he or she is entitled to.

To ensure that government settles backlog of accrued rights, PFAs are not allowed to give access to their retirement savings until the Federal
Government releases the accrued rights component.

This means that a retiree cannot access his or her Retirement Savings Account (RSA) through the Pension Funds Administrators without the accrued pension rights component.

So for Public Service Workers who migrated to the Contributory Pension Scheme (CPS) in 2004, shortly before they retired, they were entitled to two components of retirement benefits.

That is the contributions accumulated in their RSA and their accrued right from the time they joined the service to the time they migrated to CPS.

A source at the office of the Accountant General of the Federation that due to the present economic challenges, the government was finding it difficult to cash back the bonds.

It said that the setback was in the liquidation of the bonds issued by the DMO and domiciled at CBN.

“Even from the budgetary stage, what is budgeted for Pension is not enough to meet the needs even if it’s cash backed 100 per cent, so it’s a problem.

“Budget Office has to make provisions for it then we at AGF can pay. But I can tell you that N7 billion was paid to PENCOM at the end of December,” the source said.

Also, a source at PENCOM told NAN that a lot of retirees blamed the commission because they did not understand that the funds were not managed by the commission, thus its not its fault.

He clarified that only people that worked for the Fedaral Government before 2004 had such set back, thus it did not affect the private sector retirees.

“Whenever we get the money, we compile our list and give the names and money to the PFAs.

“The simple truth is that it is the Federal Government that is delaying the payment of accrued rights of retirees.

“Initially we were owing from October 2015 but some funds were released recently and two weeks ago we were able to pay workers that retired from
November to December 2015,” the source said.

The source revealed that the biggest challenge right now was not just having the bonds cash backed, but rather, how to calculate the accrued pension a retiree was owed.

He said that a worker was “retired” at the level he or she was as at 2004 and that whatever was determined to be the person’s accrued pension
rights was then converted to bonds which was expected to mature when a worker retired.

The source said the bonds were supposed to yield interest and boost the expected amount, yet no significant interest was reflected in the amount
remitted for each retiree.

The source said each retiree was paid exactly or a little more than what was determined to be his accrued rights as at June 2004.

Mohammed Julde, who worked with the Ministry of Education from 1984 to 2016, called on the Federal Government to heed the cry of its former
workers.

He said it was not fair for them to suffer this after judiciously serving in the public service.

He urged public servants still in service in key departments to assist in resolving the issue as it affected every government worker that had been in the employment of the Federal Government before 2004.

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With the certificates, the retirees from local governments and public primary schools will be able to draw pensions from their various pension fund administrators.

The governor, who presented the certificates at a ceremony organised by the Local Government Staff Pension Bureau in Osogbo on Friday, said he was sensitive to the plights of the retirees.

Aregbesola said in spite of the tough financial challenges on account of dwindling oil prices and sharp reduction of receipts from the federation account, the state had been committed to paying pensions and gratuities to its retirees.

The governor said, “Today’s beneficiaries are 194 retirees in the local governments and primary schools and will receive bonds valued at N1,283,927,023.59).”

He stated that the first batch of 78 retirees in the local governments and primary schools of the state received their retirement bond certificates valued at N593,774.42 in December 2014.

He explained further that the second batch were 188 retirees in the local governments and primary schools and they received bond certificates valued at N1,470,977,537.14 in September 2015.

The Permanent Secretary, Bureau of Local Government Staff Pension, Kayode Afolabi, said the retirees had been trained on how to live healthy lives in retirement and how to get themselves productively engaged for the rest of their lives.

Afolabi urged the retirees to use their money judiciously and avoid wasting it.

The Head of Service, Sunday Owoeye, commended Aregbesola for prioritising the welfare of the state workforce.

He said in spite of the current shortage of fund, the state was ranked third after Lagos and River states by PENCOM.

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The strike was called off sequel to the meeting between state government and leadership of the unions where it was resolved that the current financial challenges from the dwindling Federal revenue account has affected payment of salaries and other critical areas of needs of the country.

The union while signing an agreement with government at the Governors Office in Osogbo, Tuesday night, listed as part of the agreement that the state has withdrawn all legal suits against the union hence the suspension of the strike.

Chief-of-Staff to Governor Rauf Aregbesola, Alhaji Gboyega Oyetola after signing the agreement on behalf of the government, noted that government will honour the agreement to the letter.

Oyetola stated that the government led by Governor Aregbesola is one that is commit‎ted to the welfare of its workers and citizens, saying Aregbesola has scored a lot of firsts in Nigeria in terms of workers’ welfare.

‎The Chief-of-Staff called for the cooperation of the Unions in moving the state forward as it enters a new face of looking inward on how to increase the finances of the state and depend less on the Federal allocation.‎
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According to him, “We have been having cordial relationship over the years, before now. Salaries were regular, even for the first time in the history of public service in Nigeria, Aregbesola’s government has been paying workers 13th month salary.

“Sometime you plan and things do not work out the way you planned them. Revenue has reduced by more than fifty percent after the decline of oil revenue. We have to look inward at this time of our state and nation.

“We have signed an agreement and we will make sure that it works. Let us all commend the magnanimity of the governor that all arrears will be paid. We must also show understanding at all times to operate with government with utmost trust. This administration has nothing to hide from anybody.

“I am glad we have been able to resolve, and we need to learn one or two lessons from this, we must learn to trust government and look inward to start developing our revenue. The support of all is needed to move the state forward”. The Chief of Staff stressed.
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The state Chairman of Council of Academic Staff Unions of Osun owned tertiary institutions, Comrade Lasisi Jimoh commended the Governor, Ogbeni Rauf Aregbesola for his understanding.

He noted that the union is ending the strike having realised that the state government is committed to the continuous appli‎cation of the Contributory Pension Scheme.

The labour leader stated that government has promised to pay staff salaries for the months of January to June 2015 and deductions for the period with‎in seven days of resumption.

“This day is a signal ‎of development. I would want to appreciate and thank our state government led by Ogbeni Rauf Aregbesola for adopting amicable approach to resolving the crises.

“With this suspension, the council hereby directs all Academic Staff across the four institutions of the state to resume work immediately while we assure the stakeholders that all our members would double efforts to redeem the period of the strike action”.

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Folashade Onanuga, the Director- General, Lagos State Pension Commission(LASPEC) who disclosed this stated that the Retirement Bond Certificate presentation would be made in Alausa on Thursday 20th August, 2015 by the Governor Ambode to 658 workers who retired from the mainstream of the Civil Service, Local Government, SUBEB and Parastatals of government.

According to her, the Retirement Benefit Bond presentation, being the 18th consecutive one since the inception of the Contributory Pension Scheme, signified the strong commitment of the State Government to the implementation and continued sustainability of the Contributory Pension scheme.

According to the LASPEC boss, the Retirement Benefit Bond Certificate is a written acknowledgment by the State Government of debt owed to employees for their years in service under the Pay- As –You- Go pension scheme which was discontinued on the 31st March, 2007.

The State Government had already redeemed the figures stated on the certificates into the Retirement Savings Accounts of the 658 retirees.

The Director General also stated that the Ambode had earlier in the month approved the release of the sum of N11 billion to meet the outstanding pension liabilities of retirees and that the fund would be disbursed on monthly basis, starting with August to reduce substantially the outstanding pension liabilities.

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