Pension Reform: Senate Proposes 75% Lump Sum Payment to Retirees
The Senate on Wednesday proposed the payment of 75 per cent to retirees as lump sum upon attainment of retirement age.
The red chamber took the decision when it considered a bill seeking to bring respite to distressed Nigerian retirees.
The Act signed in to law in 2004 and amended in 2014, currently empowered the Pension Commission and the funds administrators to pay 25 per cent lump sum to retirees before calculating the amount to pay them on monthly basis as pension, from the remaining 75 per cent.
The bill which passed second reading was tagged “Pension Reform Act 2014 (Amendment), 2022.”
The proposed legislation was sponsored by Senator Aliyu Wamakko (Sokoto North).
Wamakko said the bill sought to amend the Pension Reform Act 2014, to provide for a definite and reasonable percentage a retiree can withdraw from his/her retirement savings accounts.
He said the provisions of the bill sought to also “provide for succor to retirees in the delay and other difficulties they stumble upon in withdrawing their savings from retirement savings account.”
He lamented that the inability of Nigerian pensioners to access their benefits after service had resulted in their suffering which, in most cases, led to eventual and untimely deaths.
Wamakko said, “None of us can claim ignorance of the long-drawn-out anguish of retirees from the Civil Service, Nigerian Prison Service, Universities and Parastatals among other Federal Agencies in this country.
“These retirees rather than enjoy retirement after selflessly serving their fatherland, have continued to live in misery and pain, leading to diseases and even death, as they cannot easily access their benefits,” he said.
The lawmaker explained that the Pension Reform Act 2004, amended as Pension Reform Act 2014, provides for a departure from the old pension scheme of Defined Benefits’, to the new Contributory Pension Scheme (CPS) that established the National Pension Commission (Pen Com).
He noted that in spite of the amendments to the Pension Act, the legislation has failed to achieve its objective of solving the intractable pension crisis in the country.
He said, “Suffice to say that the issue of pension Nigeria has more or less, turned a monster that has defied all efforts by successive governments to contain it.
“In view of the retirees protracted sufferings and pains who are equally Nigerians, continued search for a lasting panacea is a duty bound upon us and all others concerned.”
Wamakko explained that the Act in Section 7(1)(a) was amended in the bill to allow retirees withdraw 75 percent of their benefits.
He bemoaned the situation where pension administrators in the country benefit at the expense of Nigerian pensioners who continue to suffer neglect.
The Senator said said, “These Nigerians who had retired from service after several years serving the nation are finding it extremely difficult to be the owners of their pension savings in this new arrangement.
“So, unless that law is made categorically clear that they can withdraw the 75 per cent which we are proposing in this amendment, then they can definitely have some relief as retirees.
He said, “Of what significance are all these huge assets and sums of money to the owners, the Nigerian pensioners who are dying daily of hunger, disease, and deprivation. I believe this is cruel and unjustifiably inhuman.
“You may recall that the DG Pencom proudly announced that as at 31st July, 2021, that they have an accumulated assets of N12.78 Trillion.
“So let the Nigerian pensioners feel the impact of the assets in the savings they have generated. But the true situation is that only the Pension Administrators a benefitting while the owners continue to suffer total neglect.”
The bill was referred by the Senate President, Ahmad Lawan, to the Committee on Establishment and Public Service Matters.
The Committee was given four weeks to report back to the Senate.
In a related development, a total of five bills also passed second reading on Wednesday.
The bills included: a bill to establish the Federal University of Transportation, Daura; and a bill to amend the Companies and Allied Matters Act to strengthen Non- Governmental Organisations in Nigeria.
Others were a bill to establish the Federal University of Medicine and Medical Sciences Egbe, Kogi State; a bill to establish the Federal Medical Centre Ijebu Ode; and a bill to amend the Nigerian Security and Civil Defence Corps Act 2010 to make for the mode of appointment of the Commandant-General of the Corps.
The bills were sponsored by Senators Abdulfatai Buhari (Oyo North), Yahaya Oloriegbe (Kwara Central), Smart Adeyemi (Kogi West), Mustapha Olalekan (Ogun East) and George Thompson Sekibo (Rivers East), respectively.
The Senate President referred the bill to establish the Federal University of Transport, Daura, to the Joint Committee on Tertiary Institutions and TETFUND; and Land Transport for further work.
He also referred the bill to amend the Companies and Allied Matters Act to the Joint Committee on Trade and Investment; and Diaspora.
On the other hand, the bills to establish the Federal University of Medicine and Medical Sciences Egbe, Kogi State, and Federal Medical Centre Ijebu Ode, were both referred to the Joint Committee on Tertiary Institutions and TETFUND; and Health (Secondary and Tertiary).
Also referred was the bill to amend the Nigeria Security and Civil Defence Corps, which was sent to the Committee on Interior for further legislative inputs.
The Senate President gave all the committees four weeks to report back to the Senate.