The Federal Government's failure to release funds for the payment of accrued pension rights has left retirees from the Federal Civil Service in a distressing situation. In the first half of 2024 (H1'24), which ended yesterday, the government did not release any funds for these payments, continuing a trend from the previous year.
The government had also reneged on its obligations in the full year 2023 (FY'23), as no funds were released despite budgetary provisions. The only release made was in the first quarter of 2023, which was for outstanding payments in 2022.
Adding to the retirees' woes, the government has failed to implement its policy on the upward review of pension amounts under the Contributory Pension Scheme (CPS) for the past 15 years, despite a legal requirement to do so every five years or together with any federal civil service salary reviews, whichever is earlier.
The government's indebtedness to retirees on accrued pension rights in the last 16 months is estimated at a staggering N230 billion.
Some pensioner groups have even called for a boycott of investing pension assets in government securities, as the government's borrowing comes mainly from these pension assets, while it has consistently failed to comply with the extant pension scheme.
The accrued rights represent an employee's benefits for the past years of service up to June 2004, when the Pension Reform Act (PRA) that birthed the CPS came into effect.
According to a report by the National Pension Commission (PenCom), the government has released a total of N980.18 billion for the payment of accrued rights since the inception of the CPS. However, the latest release was in March 2022, amounting to N14.92 billion, and no further payments have been made since then.
