Re­tirees mount pres­sure on PFAs over N45bn ac­crued pen­sion

Daily Trust - - BUSINESS - By Francis Arinze Iloani

Re­tirees are mount­ing pres­sure on Pen­sion Fund Ad­min­is­tra­tors (PFAs) to ad­dress is­sue of de­lay wit­nessed in pay­ment of ac­crued pen­sions, an in­ves­ti­ga­tion by the Daily Trust has found.

Sources within PFAs said there was de­lay in re­ceiv­ing ac­crued pen­sion remit­tances from the fed­eral govern­ment, amount­ing to about N45bn since Oc­to­ber last year, say­ing that de­vel­op­ment cre­ated an un­easy re­la­tion­ship be­tween PFAs and re­tirees.

“As at to­day, ac­crued rights of some work­ers that re­tired since last year have not been re­mit­ted to PFAs,” said a source not autho­rised to speak on the de­vel­op­ment. “Re­tirees blame PFAs and the de­lay is try­ing to cre­ate a prob­lem be­tween PFAs and them.”

The source said that some re­tirees be­lieved that there was no dif­fer­ence be­tween the old scheme and the new pen­sion schemes. It would be re­called that pen­sion­ers com­plaints about huge back­log of un­paid pen­sion led to the in­tro­duc­tion of the con­trib­u­tory pen­sion scheme.

“If this prob­lem con­tin­ues to linger on, then, there is no any ma­jor dif­fer­ence be­tween the old sys­tem and the con­trib­u­tory pen­sion scheme,” the source said. “For in­stance, some re­tirees go as far as say­ing if it was in the old scheme, they knew how to pull some strings and get their money. But in the new scheme, their money is trapped in the PFAs, not know­ing that we are not re­spon­si­ble for the de­lay.”

The de­lay in remit­tances of pen­sion for as much as one year is in to­tal dis­re­gard to the seven-day max­i­mum gap al­lowed in the Pen­sion Re­form Act, 2004 (amended 2014) for re­mit­tance of pen­sion after salaries have been paid.

In­ves­ti­ga­tion re­vealed that this was one of the rea­sons the PenCom has not yet of­fi­cially opened the trans­fer win­dow for con­trib­u­tors to switch their Re­tire­ment Sav­ings Ac­counts to pre­ferred PFAs.

PFAs said back­log of un­remit­ted pen­sions made it al­most im­pos­si­ble for RSA hold­ers to switch PFAs.

How­ever, the fed­eral govern­ment re­cently said it has “largely cov­ered” its re­cur­rent ex­pen­di­ture as at June 2016, adding that it has paid out N79.18bn as pen­sion and gra­tu­ity within the pe­riod, rep­re­sent­ing 42.1 per­cent of the to­tal amount bud­geted in 2016 bud­get for the same pur­pose.

The PenCom said that the N50bn ap­pro­pri­ated in 2016 for re­tire­ment ac­crued rights fell short of the N91bn re­quired to set­tle the claims.

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