Federal Retirees Face Mounting Pension Arrears
Retirees of the Federal Civil Service are experiencing exacerbated financial woes as the Federal Government has yet to disburse funds for accrued pension rights in the first half of 2024, despite the fiscal year ending yesterday.
This continues a troubling trend from the previous fiscal year, where no funds were released despite budgetary allocations. The only release in 2023 was for outstanding payments from 2022.
Compounding the issue is the government’s failure to implement mandated pension adjustments under the Contributory Pension Scheme (CPS), which should occur every five years or concurrently with civil service salary reviews.
Currently, the Federal Government owes retirees an estimated N230 billion in accrued pension rights over the past 16 months. This figure underscores a broader systemic issue affecting retirees’ financial security and well-being.
The Pension Fund Operators Association of Nigeria reports that over 60% of pension assets have historically been invested in Federal Government securities since the CPS’s inception in 2004.
This substantial investment contrasts sharply with delays in pension payments, highlighting a disconnect between investment strategy and pensioner needs.
Experts and stakeholders, including Mr. Olumide Oyetan of Stanbic IBTC Pension Managers Limited and Mrs. Oluwakemi Ugwu of Nigerian University Pension Management Company Limited (NUPEMCO), lament the sporadic release of funds and emphasize the CPS’s foundational goal: timely retirement benefits.
Senator Fasuyi Oluwole of the Senate Committee on Establishments and Public Service emphasizes legislative oversight to ensure retirees receive their entitlements promptly.
Meanwhile, retiree advocacy groups like the Contributory Pensioners Union of Nigeria (CPUN) and the Association of Retired Federal Senior Public Officers of Nigeria (ARFESPON) decry the delay in payments as detrimental to retirees’ health and overall quality of life.
In response to these challenges, Mr. Ivor Takor of the Centre for Pension Rights Advocacy underscores the constitutional obligation for regular pension reviews, which successive administrations have failed to uphold.
He criticizes the government’s reliance on pension funds for securities investment without commensurate benefit to retirees.
