Federal Government Retirees Face Hardship Due To N230bn In Unpaid Pensions...CONTINUE READING

Retired civil servants under the Federal Government are facing increasing hardships as the government has failed to disburse funds for accrued pension rights throughout the first half of 2024, marking another year of financial strain for pensioners…….CONTINUE READING

Since the onset of 2023, there has been a complete absence of funds allocated despite provisions made in the fiscal year’s budget. The sole disbursement in the first quarter of 2023 was directed towards settling outstanding payments from the previous year.

Adding to retirees’ woes is the government’s prolonged neglect of its policy to periodically adjust pension amounts under the Contributory Pension Scheme (CPS), which has been suspended for 15 years. This suspension contradicts legal mandates requiring adjustments every five years or concurrent with any federal civil service salary reviews, whichever is earlier.

The accumulated debt owed to retirees now stands at an estimated N230 billion over the past 16 months alone.

Calls from various pensioner groups urging a boycott of government securities investments have gained traction, citing concerns that such investments largely fund government borrowing activities. Concurrently, there has been a consistent pattern of non-compliance by the government with regards to the existing pension scheme.

Accrued rights, which represent the accumulated benefits for years of service up to June 2004 when the Pension Reform Act was enacted, remain a contentious issue. The National Pension Commission (PenCom) reported that by 2021, the Federal Government had disbursed a total of N980.18 billion towards settling accrued rights, with N100.29 billion released in that year alone. However, subsequent releases have stagnated since February 2023, leaving retirees in a precarious financial state.

Financial analysts attribute the delays in fund disbursement to a 21.3% decrease in provisions for pensions, gratuities, and retirees’ benefits as stipulated in the 2024 Appropriation Act. This decline saw allocations reduced to N673.01 billion from the previous N854.81 billion in 2023.

Moreover, statistics reveal that a significant portion of pension assets, approximately 62.03% in Q1’24, continue to be invested in Federal Government securities, amounting to N12.2 trillion out of a total N19.7 trillion in pension fund assets.

This ongoing financial struggle highlights the urgent need for sustained dialogue and pressure from labor unions to compel the Federal Government to honor its financial obligations towards retirees under the Contributory Pension Scheme.

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