PenCom Commences 2.5% payment of Retirement Differentials

On Monday 26, the National Pension Commission, PenCom, said it had started payment of the 2.5 per cent retirement differentials of 2004 and 2014 pension contributions specified by the Pension Reform Act, PRA.

The Director-General, PenCom, Mrs Aisha Dahir-Umar, said this at the 2021 Journalist Workshop organised by the Commission in Lagos with the theme: “Positioning the Pension Industry in the Post COVID-19 Era.”

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

According to the Agency report, Dahir-Umar explained that the differential came about from the addition of minimum pension contributions for employers.

Mrs Dahir slated that the rate is from 7.5% to 10%, which according to the commission, stays in line with Section 4 (1) of the Pension Reform Act, PRA of 2014.

She said these payments would undoubtedly boost the RSA balances of the beneficiaries towards better retirement benefits.

She added that settlement of these outstanding accrued pension rights of verified and enrolled federal government retirees would result in reversing a significant 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.

PenCom Commences 2.5% payment

Meanwhile, 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.

Abdulrahman noted that some retirees might likely get additional lump sum or enhanced annuity or programmed withdrawal, stressing that PenCom has also begun the computation of the active employees to enable payment.

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.

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

Employers’ 10 per cent minimum contribution is an increase of 2.5 per cent over the 7.5 per cent contribution stipulated by the repealed 2004 PRA.

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