‘Pension enhancement from retirees’ fund growth, not FG’

The recent pension enhancement authorised by the National Pension Commission (PenCom) was as a result of growth in retirees’ funds and not as a result of funds released by the Federal Government.

A recent framework on the enhancement seen by Daily Trust indicated that the enhancement was as a result of clamouring for enhancement of pension given the appreciable growth in the RSA.

To effect the enhancement, PFAs would use the surplus generated from returns on investment of retirees’ funds to enhance the pension of eligible retirees.

PenCom fixed the effective date for the maiden Pension Enhancement under CPS as December 2017 pension payroll as subsequent reviews of pension shall be as advised by the commission.

The commission directed PFAs to adjust the pension of the affected retirees to reflect the enhanced pension in the December 2017 pension payroll.

Note that the first set of pension enhancement would be for employees, who retired between July 2007 to December 2014, using their RSA balances as at 31 December 2016 as the basis.

To facilitate for the initial the process enhancement, PFAs are required to review the retiree’s data/information pending other data to be provided by the commission from time to time, for subsequent enhancements.

The PFAs were required to use the Pension Enhancement Template provided by the Commission to re-compute the new monthly pension using the current age of eligible retirees and their RSA balances as at 31 December 2016.

The retiree RSA balance as at 31 December 2016 would be applied in determining the enhanced pension which shall be exclusive of the balance in the Voluntary Contribution (VC) as retirees would not be allowed to use his/her VC balance to augment enhanced pension.

PenCom also directed that the earned growth would be used for pension enhancement only and should not be applied to pay additional lump sum.