Category: Pension

By Ivor Takor

A State’s public servant is anyone who works in the public service of the state and local government in any capacity.

The state public service is responsible for the implementation of policies, programmes and projects of any government in power.

It daily administer governments activities and sees to the determination and realisation of state goals; it provides various services to citizens to meet their needs, which includes health, education, public utilities as well as registration of births, marriages and deaths; it also generates revenue for the state among other services.

The framers of the Federal Republic of Nigeria 1999 Constitution as amended, taking into consideration the important roles public servants play in the administration and development of the state, guaranteed their pension to enable them leave a life in retirement, that is closer to what they were used to, during their active service.

Section 210(1) of the Constitution provides that “Subject to the provisions of subsection (2) of this section, the right of a person in the public service of a state to receive pension or gratuity shall be regulated by law.

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Subsection (2) provides that “Any benefit to which a person is entitled in accordance with or under such law as is referred to in subsection (1) of this section shall not be withheld or altered to his disadvantage except as is permissible under any law, including the code of conduct.”

Subsection (3) provides that “Pension shall be reviewed every five years or together with any State Civil Service salary reviews, whichever is earlier.”

Nigeria in 2004 carried out a comprehensive reform of its pension schemes, with the promulgation of Pension Reform Act 2004, which as repealed by and replaced with the Pension Reform Act 2014, effective on 1st July, 2014. The Act established a Contributory Pension Scheme for employees’ in the Public Service of the Federation, Federal Capital Territory and the Private Sector. Employees of the Public Service of States and Local Governments were excluded from the coverage of the Act because state governors opposed their inclusion on the grounds that pension is not one of the items that is in the exclusive legislative list of the Constitution.

In 2006 or thereabouts, the National Council of State decided that every state should enact its own pension law, adopting the Contributory Pension Scheme (CPS), already in operation in the Federal Public Service and the Private Sector, using a draft Bill presented the Council for that purpose by the National Pension Commission (PenCom).

The decision of the Council was based on the fact that the Pension Act 1990, which was of universal application in the public services of the federation, states and local governments had been repealed by Section 99(1)(a) of the Pension Reform Act 2004, leaving States public servants with no law guaranteeing their pension, contrary to the provision of Section210(1) of the Constitution.

We are going to be discussing the status of implementation of the CPS in states, in alphabetical order. Today we will be starting with Abia State.

Perusing the activities of state governors attitudes to pension administration, pension expert and a two term President of the Non-Academic Staff Union of Education and Associated Institutions (NASU), Ivor Takor in a report made available to the newspaper said Abia State enacted the Abia State Pension Reform Law, 2017 on 20 March, 2017.

Takor who is also a two terms National Treasure of NLC and member of the inaugural Board of PenCom and a retired Director is an alumnus of the National Institute of Policy and Strategic Studies (NIPSS), Kuru-JOS, Plateau State.

He said that according to PenCom, the state is yet to implement any other milestone towards full implementation of the CPS as it is yet to establish a Pension Bureau to oversee the process of implementation of the CPS; Yet to commence the registration of its employees with Pension Fund Administrators (PFAs); Yet to commence the remittance of pension contributions; Yet to conduct an Actuarial Valuation to determine the Accrued Pension Rights of employees that would be transiting into CPS; and yet to open Retirement Benefits Bond Redemption Fund Account; yet to commence funding of Accrued Rights and no Group Life Insurance Policy.

He pointed out that 19 years into pension reforms in Nigeria and the introduction of the CPS under the Pension Reform Act 2004, which repealed the Pension Act 1990 that was of universal application in the federal and states public services, Abia State government enacted a law on the CPS in 2017 and stopped at that level.

He said: “Persons that have ruled Abia State from the introduction of the CPS in 2004 to 29th May, 2023 include Orji Uzor Kalu from May 29, 1999 to May 29, 2007; Theodore Orji from May 29, 2007 to May 29, 2015; and Okezie Ikpeazu from May 29, 2015 to May 29, 2023. All these former Governors of Abia state as well as their political office holders, collected their salaries and enjoyed benefits attached to their respective offices regularly.

“Former Governor Orji Uzor Kalu is currently a Senator of the Federal Republic of Nigeria and a Chieftain of the ruling party, APC. Theodore Orji was a member of the 9th National Assembly as a Senator of the Federal Republic of Nigeria. Okezie Ikpeazu, on his part, made a failed attempt at moving from Umuahia Government House to the Red Chamber of the National Assembly in the last National Assembly election.

“The level of poverty, destitution and deprivation that has been foisted on pensioners in Abia state and members of their family, as a result of the failure of successive state governments to comply with the provisions of the Constitution by putting in place, appropriate structures for the payment of pension to retired public servants of the state has become a matter of great concern to Abia state public servants, who are not sure of what will be their fate, when they retire. Meanwhile Abia state is reported to be among the 22 states that are currently paying life pension to their former governors and deputy governors.”

The Pension Transitional Arrangement Directorate (PTAD) has staggered the use of its  I AM Alive” Confirmation Solution program on different dates for its categories of pensioners under the Defined Benefits Scheme (DBS).

The Executive Secretary, PTAD, Dr. Chioma Ejikeme made this known in a speech at the South-East Stakeholders Engagement Forum, held at Awka, Anambra State.

She said the staggering of the program will ensure an efficient and effective delivery and prevent a heavy flow of traffic on its website.

She said the Police Pensioners have been scheduled for 14th April, 2023 and 13th October, 2023; Customs, Immigration and Prisons Pensioners scheduled for 1st June, 2023 and 31st December, 2023; Civil Service Pensioners scheduled for 1st July, 2023 and 31st January, 2024; and Parastatals Pensioners scheduled for 1st  August, 2023 and 28th February, 2024.

She called on pensioners to take note of the scheduled dates as they concern their respective departments.

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She assured that any changes to these dates will be duly communicated through the media and other appropriate channels.

She further disclosed that PTAD has provided a six-month grace period for each department and their pensioners to complete their I Am Alive Confirmation (IAAC) Solution.

She noted that PTAD has trained Pension Desk Officers from the Ministries, Departments and Agencies where pensioners retired from, as well as the various representatives of pension unions on the use of the application, and they will and have been assisting pensioners who are unable to carry out the confirmation on their own.

So far, she said, three operational departments, namely Police Pension Department; Customs, Immigration and Prisons Pension Department; and the Civil Service Pension Department have commenced their confirmation process, and the reports have been encouraging.

She commended the pension union executives who have disseminated information about the I Am Alive Confirmation Solution to their members and have provided assistance to those who need help with confirming their aliveness.

Dr. Ejikeme however noted that, more needs to be done, pleading that the unions help them spread the message to all the nooks and crannies of the Zone and beyond.

No pensioner who is alive should be left out of this very critical and important exercise that would determine a pensioner’s eligibility to continue to receive pension, she stressed.

She said: “The Directorate on the October 12, 2021, launched the I AM Alive Confirmation Solution and successfully completed the Pilot Phase where they tested the application on 50,000 randomly-selected pensioners from the four operational departments and the six Geo-political zones. Following the success of the Pilot Phase, PTAD fully rolled out the solution for the use of our Pensioners on the April 14, 2023.

“As part of our resolve to ensure that no eligible pensioner is left out, we will like to inform all our pensioners in the United States of America, Canada and the United Kingdom, that a Survey is being carried out by the Directorate to ascertain the number of pensioners we have in these countries and their various locations within the countries.

“We have a good number of unverified pensioners in these locations. The information gathered during the survey will enable us plan accordingly for Diaspora verification. I therefore enjoin you to inform your members who are living in these countries to visit the PTAD website and take part in the survey. It is very important. They should log on to our website – www.ptad.gov.ng to access the link for the survey.”

DAMARIS: Good day, I am Damaris from Imo State, Owerri, Ikeduru Local Government area. I retired in December 1, 2000 from primary school SPEB. My retirement number is anonymous. My grade level is 128. My pension type is local government. We were owed for four years before we started getting our pay. I received my last pension pay in June 2020. Kindly help me.

PTAD: Pensioner retired from Local Government.

BAWA: Dear Omobola, we are the administrator of our late father Bawa. He worked with immigration service from 1987 and was down size during the presidential task force of 2006. Since then, we have not been paid a Kobo. We don’t know where to go or what to do sir. Kindly help us out.

PTAD: NOK was contacted to come for verification

MABAWONKU: My name is Mabawonku, This is a reminder to the Newspaper that I have sent my bank statement details from retirement to date to PTAD as directed since July 6 2022. But I have not received any response from them. I retired from Nigeria Educational Research and Development Center (NERDC) in 1993 after serving for 11 years. I complained that my federal share of my gratuity from 1982 to 1993 has not been paid. Secondly, my pension from January to July 1993 was not paid. I have done physical verification at PTAD office in Lagos in 2019, submitted bank statements from 2008 to date as requested by the PTAD including the one showing the gratuity paid in 2017.My original pension file has been retrieved from NERDC by PTAD Since Nov 2017. With all the conditions met since 2019, the gratuity and pension arrears have not been paid. I thank you for your effort in helping me. Please help.

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PTAD: Payment of pension resolution is ongoing. Pensioner will be contacted soon.

ISA:  My name Isa. I retired from active service in June 2007 during a downsizing exercise. I am yet to get my pension. My PFA is ARM Pension. I did the usual verification sometimes ago. But I have not been paid. Please help me. Thank you.

PTAD: Mr. Isa falls under the Contributory pension Scheme. PENCOM will resolve his case.

ABDULLAHI: I am Abdullahi from Jos, Plateau State. My father was a staff with Ministry of Defence, civilian units for 16 years before he died in 1995. I have attended various screening and verifications and the last one was in Jos in 2017. I have submitted all the required documents for the payment of gratuity and pension benefits as a Next of Kin (NOK), but up to no avail. In 2020 I was called from PTAD to submit some documents including bank account details which I did. From your publication of my case, PTAD is asking for is verification number which I scanned and sent since then. I hope Omobola will assist me.

PTAD: PENCOM to resolve

NNAM: The publication in The Nation of September 28 2022 is a welcome relief to pensioners. My name is Nnam I retired in February 2010 from State Universal Basic Education Board Asaba (SUBEB). I complained that I have not been paid my pension despite going through three times verification exercise in Abuja. Instead I have been getting messages of over payment from PTAD Abuja. But I want to thank the newspaper for acting on my petition over the nonpayment of my pension. PTAD has informed me that my case is receiving attention. Since last week they have been on phone with me. I really appreciate the newspaper.

PTAD: Pensioner is requested to provide Bank Statement from January 2020 to December 2022.

ANONYMOUS: My name is Melville. I retired from the Nigeria Immigration Service (NIS) in February 2022.

  My PFA is Access (formerly First Guarantee). My PFA said my name was omitted and they had sent a reminder to PenCom. Kindly expedite payment.

PENCOM: Payment has been made. Please, visit your Pension Fund Administrator (PFA) for confirmation.

TASIU: Good day, I am ComradeTasiu. I write on behalf of Osowale. His PFA is Stanbic IBTC Pension Managers Limited.

He was registered in October 2021 and given a retirement benefit enrolment slip.

He retired on August 13, 2021 at the Air Force Comprehensive School, Ibadan, a unit of the Ministry of Defence.

PENCOM: Payment has been made, Please visit your Pension Fund Administrator for confirmation.

CHUKWUEMEKA: Good day, my name is Chukwuemeka. I have been following up with my late wife’s gratuity since 2019. She passed on on March 25, 2019. I have submitted the documents required.

PENCOM: Dear Sir, kindly provide more details such as the Pension Fund Administrator and PIN of your late wife, her former employer and any other information that will assist the Commission respond to your complaint adequately.

ANONYMOUS: Thanks a lot for reposting my request for the intervention of PenCom on the payment of pension enhancement by the PFAs.

Since my retirement in 2014, I received enhancement only once ( 2017) and this has not been addressed by PenCom. I have been excluded for the second time, which means I won’t enjoy any enhancement until 2026, a period of nine years. This is unacceptable to me.

I retired as a Director of Finance, so I have knowledge of investment. I believe PenCom should pay more attention for the reason that most pensioners depend mostly on the monthly payments. Therefore, we expect enhancement on monthly payments.

PENCOM: Dear Sir, kindly visit your pension Fund Administrator for more information on the status of your pension enhancement.

DAMILOLA: Good day, my name is Damilola. I lost my dad in July 2021 but we started processing his death benefit in January 2022. We submitted the required documents, including the Letter of Administration to PAL Pension in September 2022.

Each time I requested to know what was going on with the processing, they kept saying they were on it. This has been going on for the past four months. How long does it take for them to investigate documents?

 I have sent emails and SMS to company and the official-in-charge but they keep saying they are on it. They said it would take about six months to clear the documents. I don’t know what else to do.

My mum is ill and the family is financially down. My siblings need to go back to school. I am really depressed. Kindly help me.

PENCOM: Good day, Madam. Kindly provide the PIN number of the deceased to enable the Commission investigate the complaint.

HAMADU: Greetings to the Director-General of PenCom. My name is Hamadu. I retired from the Independent National Electroral Commission (INEC), Abuja as Deputy Director on Grade Level 16/9 in November 2017.

My pension administrator is Stanbic IBTC. My complaint is on the non-payment of 2.5 per cent and arrears.

PENCOM: Please provide your PIN to enable the Commission investigate further.

ADOGA: Dear Omobola, my name is Adoga from Makurdi, Benue State. I retired from the Nigerian Railway Cooperation in February 2015. My PFA is Premium Pension. In 2016, I joined Leadway Pensure for Annuity. Up till now, my 2.5% is yet to be paid. When l visited premium office in Makurdi, I was asked to apply for the payment which I did since July 2022. Please I want you to help me.

PENCOM: Payment has been made into your Retirement Savings Account. Please contact your Pension Fund Administrator

ANONYMOUS: I am a police officer. I have a problem with my pension. It has not been paid into my pension account since 2017. I have been on this for the past three years. But my efforts have prove abortive. Please help me.

PENCOM: Kindly provide your name and PIN.

ABUBAKAR: Hello, my name is Abubakar. I am a next-of-kin. Does the president’s approval of outstanding pension include 2014 retirees.

My father died in 2013. Will his death benefit be paid? And how long does it take to get it? Thank you.

PENCOM: Please note that for your late father’s death benefits to be paid, you must submit to the Fund Administrator (PFA) and the commission for processing the following: his RSA PIN, full name, name of PFA, among others. Thank you.

ANONYMOUS: I am Inspector Isah (retd). I retired on January 15, 2020 at the Niger State Police Command at 60 years. But I was paid only 25 per cent lump sum of N1,665,000 on February 2021 out of my total amount of N5.1million.

I was also put on monthly pension of N31,758 from March 2021 to date. My complaint is that I deserve to be paid at least 50 per cent of my entitlement. I am really aggrieved.

PENCOM: You are entitled to 25 per cent lumpsum.

A CONSORTIUM of insurance companies has disbursed N535 million as Group Life Insurance claims to 68 beneficiaries of the Nigerian Police Force (NPF).

  They include Leadway Assurance Company Limited, Sanlam Insurance, Mutual Benefits and LASACO.

At a ceremony at the NPF’s Headquarters in Abuja, the Acting Inspector-General of Police, Olukayode Egbetokun, stressed that his leadership would “promptly fulfil the obligation of providing insurance and other benefits to Police personnel, who have sacrificed immensely for our beloved country by providing comprehensive welfare support aimed at creating an environment where every officer feels valued, protected, and motivated to give their best in service to our nation”.

He praised the deceased and injured officers for their valour, dedication, and display of heroism during their service. He commended Leadway and the consortium of insurers for their professionalism and commitment to prompt claims payment.

Also, the Managing Director/CEO of Leadway Assurance, Mr. Tunde Hassan-Odukale, who represented the consortium, said: “We extend our deepest condolences to the families of the departed officers who made the ultimate sacrifice in the service of our nation. As an organisation, we are fully committed to fulfilling our promise of providing financial security to our policyholders.

“This prompt claim payout to our heroes further demonstrates the benefits of insurance and our unwavering dedication to supporting the families left behind.

“This consortium is proud to be at the vanguard of protecting the financial well-being of the personnel of the Force and their families. We believe in the importance of honouring our obligations promptly and stand as beacons of trust for the insurance industry as an assured partner in safeguarding the wealth and well-being of Nigerians.”

Hassan-Odukale further emphasised the importance of Group Life Insurance as a safety net for Nigerians putting in the work, especially those who stay awake to guarantee the citizens’ peace of mind, no matter the risk to their lives.

“Group Life Insurance plays a crucial role in protecting the financial wellbeing of families when they face the loss of a loved one or are no longer able to cater to their loved ones or families as a result of death or fatal injuries. Our hearts and prayers go to our heroes, and we hope this payment will provide comfort and fortitude to the families as they navigate the future”, he added.

The Contributory Pension Scheme (CPS) Retirement Pack is a joint publication of the National Pension Commission (PenCom) and the National Insurance Commission (NAICOM).

The Pack is a guide for prospective retirees under the CPS. It provides information on the two modes of accessing retirement benefits: Programmed Withdrawal (PW) and Retiree Life Annuity (RLA). The Retirement Pack helps would-be retirees to make informed decisions.

Pension Fund Administrators (PFAs) are mandated to make available the Retirement Pack to potential retirees to guide them towards a smooth retirement process. The PFAs are to host the Retirement Pack on their websites for easy access to potential retirees. The Pack contains Frequently Asked Questions (FAQs), features of PW and RLA and details of the roles of the prospective retirees and the PFAs in facilitating the payment of retirement benefits.

As contained in the CPS Retirement Pack, PW is a product offered and administered by the PFAs under the regulation and supervision of PenCom. PW offers a retiree the option of a lump sum and regular monthly or quarterly pension payments. In contrast to the PW is the RLA, a product of Life Insurance Companies regulated by NAICOM. Like PW, monthly or quarterly payments are made to the retiree who chose RLA.

The retiree under PW enjoys periodic pension enhancement resulting from increased investment returns. Furthermore, retirees under PW may move to RLA after 12 months of being under PW. Finally, under PW, if a retiree dies, the balance in his RSA is paid to the legal beneficiary. Depending on the RLA product, there may also be periodic pension enhancements. It is pertinent to note that a retiree on RLA cannot move to PW. The retiree can only move to another RLA provider after at least two years with his existing provider. PenCom has put in place Administrative Sanctions to penalise PFAs that fail, neglect, or refuse to enlighten would-be retirees on the features of PW and RLA.

RSA holders with at least six months to retirement should acquaint themselves with the modes of accessing their retirement benefits. Furthermore, RSA holders should get all documents required to access their benefits ready. The documents include a Notice of Retirement from the Employer, a current Payslip, and Evidence of Accrued Rights or acknowledgement of Indebtedness (for employees of Treasury Funded government agencies). The retirement Pack provides the list of required documents. So, the first step for a prospective retiree is to obtain the Pack from his PFA.  RSA holders who are already retired should approach their PFA and get a Data Confirmation letter and Standard Retirement Notification. After that, they can choose their preferred mode of pension payment and apply for their retirement benefits.

Retirees may visit their PFAs’ websites to download the retirement pack or the PFAs to obtain it. Should a retiree under PW have complaints or concerns, he should direct such matters to his PFA. Still, if the retiree is not satisfied with the response of the PFA, he can escalate the issues to PenCom for intervention. Similarly, a retiree under RLA is expected to contact his RLA provider on any matter relating to his benefits. If not satisfied, he can escalate the issue to NAICOM for resolution.

PenCom remains committed to ensuring RSA holders receive their retirement benefits as and when due.

                 •Culled from PenCom

Pension fund assets have continued on its growth trajectory hitting N16.107 trillion in May, this year from N15.771 trillion the previous month.

This represents a growth of N336 billion and 2.13 percentage growth

Also, Retirement Savings Account (RSA) membership moved to 9.99 million during the period under review.

PenCom stated this in its monthly report on pension funds industry portfolio for the period ended May 31, 2023.

The pension sector regulator maintained that out of the N16.107 trillion recorded in May, Pension Fund Administrators (PFAs) invested 10.43 trillion in Federal Government of Nigeria (FGN) Securities.

A further breakdown of the report showed that N10 trillion was invested in FGN bonds; N198.19 billion in Treasury Bills; N11.77 billion in Agency Bonds; N159.62 billion in SUKUK and N60 billion in Green Bonds.

The PFAs also invested N278.05 billion in State Government Securities; Corporate Debt Securities, N1.72 trillion and Money Market Instruments, N1.74 trillion.

YAWOYE: Good day, Omobola Pension Solution. Please, I want a clarified about the Annuity and Programme Withdrawal. My lack of understanding of the two has made me indecisive.

PENCOM: Retiree Life Annuity (RLA) and Programmed Withdrawal (PW) are modes of accessing your retirement benefits which could be monthly or quarterly. However, RLA is a product administered by insurance companies, who undertake to pay you a periodic pension for a guaranteed period while PW is administered by the Pension Fund Administrators (PFAs), who also pay you a periodic pension based on the funds in the Retirement Savings Account (RSA).

ANNONYMOUS: I want to enquire if the borrowing of 25 per cent from our contribution is true?

PENCOM: Dear Sir/Ma, please, note that you are not allowed to borrow funds from your Retirement Savings Account (RSA). However, in the event of a job loss and not securing another job after four months, you can apply for 25 per cent of your RSA balance. Also, you can apply for a maximum of 25 per cent towards equity contribution for mortgage subject to the guidelines issued by the Commission.

USMAN: Good day, my name is Usman. I work at BAGCO NIG PLC. I want to update my date of birth. How do I go about it?

PENCOM: Dear Mr. Usman, please visit your Pension Fund Administrator to guide you.

BROWNSON:My name is Brownson. I lost my wife in active service on December 3, 2021. She left behind two kids for me to care for. After a year, she was laid to rest and I started processing her death benefit with Premium Pension where every document, including letter of administration requested by the PFA, was submitted. This was done on August 30, 2022, but up till date, nothing has been done. It has been almost a year and my children have stopped schooling as a result of lack of funds. Please, how long does it take them to respond? Kindly help me.

PENCOM: Kindly provide the Retirement Savings Account (RSA) Pin of the deceased.

TANIMU: Hello, my name is Tanimu. I signed a consent form on June 14, 2023 and sent it to Trustfund Pension via email to pay my voluntary contribution. On June 15, 2023, I followed up with Trustfund and I was told that they have sent my request to PenCom for approval and payment. But, up till now, I haven’t received any payment. I would like to know what is delaying the payment. Thank you.

PENCOM: Dear Mr. Tanimu, your request is not in the Commission. Kindly contact your PFA to forward the request to PenCom.

SAKA: I am a Retirement Savings Account (RSA) holder at OAK Pension Limited. As a reminder, I am pleading that OAK respond to my 25 per cent benefits application. I have sent required documents to them for approval since June 9, 2023, yet they have not paid me. PenCom should please check its email to see my request and approve to enable OAK process the payment.

PENCOM: Dear Mr. Nurudeen, your request is not in the Commission. Kindly contact your PFA to forward the request.

ADEYEMI BAJO: Hello, my name is Adeyemi Bajo. My pension manager is Access Pension. I have been trying to access my pension for over two months to no avail. The excuse they gave me is that I did a change of name twice. Meanwhile, my documents were forwarded to them for action but they claimed that PenCom had refused to update my information. As a result, my payments cannot be made. Kindly help me.

PENCOM: Dear Mr. Adeyemi, please visit the National Identity Management Commission (NIMC) to rectify the issue, then go back to your PFA who will guide you on the next steps.

BASIL: I work with the Federal Road Safety Commission (FRSC) and I have up to 40 months’ unremitted pension. I have written but I did not receive a response from PenCom. Kindly attend to my request as I want my contributions credited to my Retirement Savings Account (RSA). My PFA then was Stanbic IBTC Pensions. But my new PFA is FCMB Pensions.

PENCOM: Dear Mr. Okeke, kindly visit the IPPIS office to resolve the issue.

TONWEE: I want to remain anonymous. I write on behalf of the late Inspector Tonwee, a police officer enlisted into force on November 1, 1980. He died on August 22, 2013. His PFA is First Guarantee Pension. After meeting up with the required documents, I was told that the fund had been returned to the commission. Kindly assist us.

PENCOM: Dear Sir, Kindly write to the National Pension Commission and forward your  Retirement Savings Account (RSA) Statement, Pay slip and Employment letter.

SUNDAY: Good day, I am Sunday. I am acting on behalf of the family of my late sister, Esther, who died as a corporal in 2016. All efforts to get her entitlement from the Nigeria Police Force have failed. I have submitted the required documents. Kindly help us.

PENCOM: Dear Mr Adero, the records at the Commission show that payment has been made.

Having for retirement has become crucial as people lead more active lives during their retirement years.

In Nigeria, the Contributory Pension Scheme (CPS) has played a vital role in enabling individuals to plan effectively for retirement.

The pension reform aims to establish a sustainable system that ensures a stable, predictable, and adequate source of retirement income for every employee.

To achieve this goal, PenCom introduced the concept of Voluntary Contributions (VC), providing workers with the opportunity to increase their retirement income. VC allows employees to make additional contributions beyond the mandatory contributions set by law (10 per cent from employers and eight per cent from employees).

Highlighting the benefits of VC, the Director-General, National Pension Commission (PenCom), Mrs. Aisha Dahir-Umar, enhances and enables accumulation of pension savings, provides flexibility in making contributions, provides tax incentives and creates inclusivity.

Enhanced Accumulation of Pension Savings

The DG said: “Voluntary Contributions enable individuals to rapidly build up their pension savings during their working years, helping them meet their retirement income goals. Employees can determine the level of contributions required to reach their target income at retirement.

“Those with specific income targets can seek advice from their Pension Fund Administrators (PFAs) or utilise the “pension calculator” available on most PFAs’ websites”.

Flexibility in making contributions

“Voluntary Contributions offer contributors the flexibility to decide the amount and frequency of their contributions. Contributions may be made monthly, quarterly, bi-annually, or annually. Contributors can start and stop their contributions at their convenience, and increase or reduce the amount as needed.”

Tax incentives

“Voluntary Contributions can lower workers’ tax liability since they are deducted from salaries before Pay-As-You-Earn (PAYE) tax. This is unlike regular savings, which are taxed afterward. Also, if individuals withdraw their VC after five years, no tax will be applied to the amount withdrawn”.

Inclusivity

Mrs. Dahir-Umar stated that Voluntary Contributions are available to workers, including retirees, under the defunct Defined Benefit Scheme (DBS) and those under the CPS who rejoin service on contract.

“Also, workers in the private sector belonging to Closed Schemes or Approved Schemes can also make Voluntary Contributions”.

How to make Voluntary Contributions

“Eligible individuals should notify their employers in writing about their intention to make Voluntary Contributions, specifying the desired amount to be deducted. However, the amount cannot exceed 1/3 of the employee’s monthly salary, in accordance with the Labour Act of 1990. Employers are responsible for remitting the Voluntary Contributions to the employee’s Retirement Savings Account (RSA). Failure to remit the contributions after deductions will result in penalties, as outlined in Section 11 (7) of the Pension Reform Act (PRA) 2014. It’s important to note that tax will be deducted from the accrued interest or principal and interest upon withdrawal if the contributions are less than five years old.

“All Voluntary Contributions are managed by PFAs and held in custody by Pension Fund Custodians (PFC). The PFAs invest and manage the Voluntary Contributions in strict compliance with the regulations issued by PenCom governing pension funds and assets. Furthermore, in compliance with the Money Laundering Act (MLA) 2011 and requirements from the Nigerian Drug Law Enforcement Agency (NDLEA), any single Voluntary Contribution lodgings of N5 million and above must be reported by the PFC.

“Individuals interested in making Voluntary Contributions should visit the PFAs in person or their websites to obtain the requirements to initiate voluntary contributions. By harnessing the power of Voluntary Contributions, Nigerian employees can secure a stable income at retirement,” she added.

The former governor of Ogun State and Senator representing Ogun East District, Otunba Gbenga Daniel has been commended for suspending his monthly pension and allowances as former governor of the state.

Daniel had written to Governor Dapo Abiodun, requesting the suspension of his monthly pension and allowances estimated at over N676,376.95.

The Peoples Redemption Party (PRP), which  gave the commendation in a statement by its Assistant National Publicity Secretary, Muhammed Ishaq, said Daniel has displayed an understanding of the challenges faced by ordinary citizens.

The party called on other politicians and public officials to follow Daniel’s example.

He said Daniel’s courageous decision demonstrated his commitment to public service, adding that it has set a commendable precedent for ethical behaviour in the political sphere.

Ishaq said: “We live in a time when public trust in politicians and public officials is often eroded by corruption, misuse of resources, and personal gain. However, Senator Daniel’s decision not to accept monthly pensions and allowances is a refreshing reminder that there are still individuals in the political arena who prioritise the interests of the people they serve over personal enrichment.”

He added that the former governor showed an understanding of the plight of ordinary citizens through that singular act.