The Federal Government has taken significant steps to address the issue of delayed pension payments to retired federal civil servants.
A recent memo from the Office of the Head of Civil Service of the Federation, obtained on Tuesday, reveals that the government is initiating the computation of accrued pensions for employees hired on or before June 30, 2024. This effort is being carried out in partnership with the Ministry of Finance.
The memo highlights the government’s recognition of the delays caused by the late release of accrued pension rights under the old Defined Benefit Scheme. It states, “It has been observed that one of the reasons for the delay in the payment of pension of retired officers is the late release of their accrued rights under the old Defined Benefit Scheme.”
To address this, the government plans to gather data on eligible officers, enabling more timely pension payments. “To enable the government to plan towards early release of the accrued rights, there is a need to harvest the data of the officers who are entitled to the rights,” the memo continues. It emphasizes that filling out the necessary forms is mandatory for the payment of accrued pension rights under the old scheme upon retirement.
According to reports, there has been a failure to release funds for accrued pension payments in the first half of 2024, following a similar shortfall in 2023. Despite budget allocations, no funds were released for the entire year of 2023, with the last payment covering outstanding amounts from 2022.
This development occurs amid broader issues with the Federal Government’s handling of pension policies. Notably, the government has failed to implement the legally required five-yearly review of pension amounts under the Contributory Pension Scheme (CPS) since its inception in 2004. The last adjustment, mandated by law, should coincide with federal civil service salary reviews or occur every five years, whichever comes first.
The government currently owes retirees an estimated N230 billion in accrued pension rights over the past 16 months. Pensioner groups have voiced their frustration, with some suggesting a boycott of investing pension assets in government securities due to the government’s reliance on these funds and failure to comply with pension regulations.
The National Pension Commission’s 2021 report noted that the government released N100.2 billion for accrued rights payments, bringing the total disbursement since the scheme’s inception to N980.18 billion. However, no payments have been made since February 2023, according to the Pension Fund Operators Association of Nigeria.