The National Pension Commission (PenCom) has revealed that 18,000 retirees are yet to receive their accrued pension benefits.
This announcement comes despite a ₦44 billion provision by the Federal Government for the payment of accrued rights between March and September 2023.
PenCom disclosed this during a workshop for journalists on the development of the pension sector, held in Lagos.
Speaking at the event, PenCom’s Director-General, Omolola Oloworaran, described the situation as concerning.
“Regrettably, we do not have sufficient funds to cover payments from September 2023 to date,” she said.
She highlighted the persistent delays in paying accrued rights, calling it a major challenge for the pension system.
The Weight of Accrued Rights
Accrued rights refer to pension benefits earned by employees in the public sector before the implementation of the Contributory Pension Scheme (CPS) in 2004.
These rights are meant to be paid directly by the government, while post-2004 benefits are funded through employee and employer contributions.
Oloworaran acknowledged the struggles retirees face when pension payments are delayed.
“Eighteen thousand Nigerians without their benefits is not a small number,” she added.
She assured stakeholders that the commission is working closely with the government to develop a sustainable funding solution.
“We are committed to ensuring retirees receive their benefits promptly and with minimal delays,” she said.
Reforms and Innovations
In a bid to improve service delivery, PenCom has introduced several reforms.
One such initiative is the revised programme withdrawal template.
This system aims to simplify access to voluntary contributions and align en-bloc payment thresholds with the new minimum wage.
“These reforms are designed to make retirement processes more efficient and user-friendly,” Oloworaran said.
PenCom has also embraced technology to enhance operations.
In October 2024, the commission launched an e-Application Portal for Pension Clearance Certificates (PCC).
This platform allows companies to apply for and receive PCCs online, replacing the manual process.
“This initiative has significantly enhanced the ease of doing business and ensured compliance,” Oloworaran noted.
Impact of the Pension Clearance Certificates
The PCC is a crucial document for organisations seeking government contracts.
It serves as evidence of compliance with the Pension Reform Act (PRA), which mandates all organisations with at least three employees to participate in the CPS.
PenCom began issuing PCCs in 2012 to ensure transparency and accountability.
As of December 2024, over 38,000 PCCs have been issued, according to Oloworaran.
The certificate is valid until December 31 of the year it is obtained, regardless of the date of issuance.
This compliance requirement applies to suppliers, contractors, and consultants working with government ministries, departments, and agencies (MDAs).
Pension Industry Milestones
The pension industry in Nigeria has grown significantly since the introduction of the CPS.
PenCom reported that as of October 2024, there were over 10.5 million contributors, with pension assets exceeding ₦21.9 trillion.
This growth is a testament to the effectiveness of the CPS in building a more sustainable pension system.
“Technology has become the backbone of transformation across all sectors, and the pension industry is no exception,” Oloworaran said.
She emphasised PenCom’s commitment to leveraging technology for better service delivery.
The Way Forward
Despite these achievements, the issue of funding for accrued rights remains a pressing concern.
Stakeholders have called on the government to prioritise the timely release of funds to ensure retirees are not left in limbo.
One retiree, who wished to remain anonymous, expressed frustration over the delays.
“We served the nation for decades, yet we struggle to receive what we rightfully earned,” he lamented.
PenCom has reiterated its commitment to resolving the issue, urging retirees to remain patient as efforts to secure funding continue.
“The welfare of our pensioners is our top priority,” Oloworaran assured.
