Pension Insight: Retirees to smile as FG moves to clear pension liabilities — PenCom DG

In a significant development aimed at resolving pension liabilities under the contributory pension scheme (CPS), the federal government of Nigeria (FGN) and critical stakeholders are working collaboratively to clear all outstanding payments owed to retirees. The acting director-general of the National Pension Commission (PenCom), Ms. Omolola Oloworaran, said concerted efforts have reached an advanced stage and are expected to lead to lasting solutions that will resolve the challenges of inadequate funding and delayed fund releases for retirees’ accrued pension rights.

Ms. Oloworaran made this disclosure in a keynote address at the workshop on the online enrolment application for pension desk officers (PDOs) of treasury-funded ministries, departments, and agencies (MDAs), held on September 17, 2024, in Lagos. The workshop was organised to equip PDOs and pension fund administrators (PFAs) with the necessary knowledge and skills ahead of the 2024 online verification and enrolment exercise set to commence on October 7, 2024, for 2025 prospective retirees of treasury-funded MDAs.

RESOLVING PENSION LIABILITIES

The PenCom DG emphasised that the non-timely release of funds to clear accrued pension rights has long undermined the primary objective of the CPS, which is to ensure that retirement benefits are paid promptly. Accrued pension rights under the CPS refer to the pension benefits earned by treasury-funded MDAs prior to the CPS commencement in June 2004. These rights are calculated based on the employee’s salary and years of service up to that point and are paid by the FGN in addition to the contributions made under the CPS.

Ms. Oloworaran further explained that the current efforts not only aim to clear all outstanding liabilities but also to establish a sustainable framework that will prevent future occurrences of delayed payments. This will create a more stable financial future for prospective retirees and give them confidence that their pensions will be paid expeditiously.

ONLINE ENROLMENT

Since the automation of the enrolment process in 2021, PenCom has made significant strides in enhancing the efficiency of the pre-retirement verification and enrolment exercise for treasury-funded MDAs. The online enrolment application, which has four integrated modules — retiree module, MDA module, PFA module, and PenCom module — enables seamless registration, verification, and enrolment of prospective retirees.

The automation of the enrolment process has significantly improved the accuracy of data collection, which, in turn, ensures that PenCom can efficiently determine the accrued pension rights of prospective retirees. These computations are critical for the preparation of the FGN’s budgetary provisions for pension liabilities due in 2025.

TRAINING PDOS

PenCom organised the workshop to provide PDOs with hands-on training on the enrolment application as part of the preparations for the verification and enrolment exercise. The workshop aims to ensure that PDOs are well-equipped to provide prospective retirees with necessary support on the online enrolment application.

“We recognize the significant role played by Pension Desk Officers in the enrolment process, and we are committed to supporting them, particularly during the occasional downtimes on the Online Enrolment Application,” she said. PenCom’s objective is continuous improvement in service delivery so that retirees and contributors can receive the best possible experience under the CPS.

PROMISING FUTURE FOR CPS RETIREES

As PenCom continues to work closely with stakeholders to clear the pension liabilities and strengthen the system, the future looks more promising for retirees under the CPS. The FGN’s commitment to resolving the issues surrounding the delayed release of accrued pension rights signals a positive shift toward speedy payment of retirement benefits for this category of employees.

The online verification and enrolment exercise for 2025 retirees of treasury-funded MDAs will mark another milestone in PenCom’s ongoing efforts to improve the efficiency and effectiveness of pension processes. Through the continuous training of PDOs and the adoption of new technologies, PenCom is ensuring a seamless online enrolment exercise.

Based on information by the National Pension Commission (PenCom).