The National Pension Commission (PenCom) has announced that it is working closely with the Ministry of Finance to address the timely payment of retirees’ benefits, with an initiative expected to take effect before the end of the year. This was disclosed by the Director-General of PenCom, Omolola Oloworaran, during an interactive media session in Lagos.
Responding to concerns about unpaid retirees’ benefits and the issue of accrued rights, Oloworaran explained that while PenCom understands the frustration of retirees, legal constraints prevent the immediate release of funds to them. She emphasized that PenCom is focused on resolving the matter through a coordinated effort with the government.
“While we acknowledge that retirees are entitled to their benefits, the law does not permit PenCom to release these funds directly. However, we are collaborating with the government to ensure that the accrued rights are addressed promptly,” Oloworaran said. She added that releasing the contributions without addressing the broader issue of government liabilities might lead to prolonged delays in the payment of outstanding benefits.
The PenCom DG also expressed optimism that the new initiative, in collaboration with the Ministry of Finance, would result in a lasting solution. She emphasized that retirees under the Contributory Pension Scheme (CPS) should be prioritized for payment, ensuring that retirees receive their full benefits within a month of retirement.
“We are aiming for a system where once you retire, your benefits are processed and paid promptly, and I am confident this will be realized before the year ends,” Oloworaran affirmed.
The Director-General revealed that approximately 18,000 retirees have been waiting for their benefits since November 2023. This follows the federal government’s recent release of N44 billion to cover the accrued rights of retired government workers from March to October 2023.
In addition to addressing payment delays, Oloworaran also tackled concerns related to annuities. The Commission has imposed a ban on African Alliance Insurance Company from selling annuities, following issues with their ability to meet obligations to retirees. She assured that the firm is cooperating with PenCom to resolve the matter and prevent future occurrences, stating, “We are working to ensure that they don’t face these issues again. For now, they are banned from selling annuities until we are confident they can meet their obligations.”
Oloworaran also addressed the topic of pension fund investments, reaffirming that pension funds would continue to be invested in Federal Government securities, including treasury bills and bonds. She stated that the risk-free nature of government-backed investments made them a prudent choice for safeguarding retirees’ funds.
“Pension funds globally invest in government securities. Nigeria’s investment in these instruments is no different from practices in other countries, and the returns have been favorable compared to other investments available in the country,” Oloworaran concluded.
