Lawmaker proposes 75% lump sum for pensioners bill

Senator Aliyu Wamakko

A bill seeking the provision of 75 per cent as pension lump sum for retirees has been proposed before the Senate, The Guardian has exclusively learnt.The bill, which was sponsored by Senator Aliyu Magatakada Wamako, seeks adjustment of some sections of the Pension Reform Act, to accommodate new provisions that could provide succour to retirees given the delays and other difficulties they are encountering in withdrawing their savings from retirement accounts.
Information obtained from the website of the National Assembly, states that the bill was documented on May 10, 2016.The Bill reads: A bill for an Act to further amend the Pension Reform Act Cap P4 LFN, to provide for definite per cent a retiree can withdraw from his retirement savings account and for other matters related thereto.

Specifically, the bill seeks to amend sections 7 (1 and 2), and 16 (I and 2) of the Pension Reform Act.Lump sum collection has remained a contentious issue, as some retirees believe that what they get as lump sum often falls below their expectations and have continued to agitate for an increase. But for the National Pension Commission (PenCom) and pension operators, retirees have to collect a moderate amount as lump sums to enable them have robust monthly or quarterly pension payment.

The Head, Research and Corporate Strategy PenCom, Farouk Aminu, said many retirees have burnt their fingers through wrong appropriation of their lump sum, adding that the quest to withdraw huge amounts at retirement, leaving little in the account is responsible for the little monthly pension some retirees receive.
He called on retirees to take less lump-sum pay-outs if they don’t have need for much financial desires, stressing that less lump-sum will help them keep more money in their accounts.
“People should take less lump sum unless they need it. If they do not need it, they should not take it. It is important people really understand this. The more lump sum you take, the less money you leave in your RSA and the lower your pension.
“People take much of their money and blow it and expect the little they left to perform wonders. People should leave a lot of money behind so that they can have huge pension,” he said.

Director-General, Lagos Pension Commission (LASPEC) Folashade Onanuga, in a related development, enjoined retirees to utilise their lump sums well and desist from frivolous spending and entering into ventures that would not afford them peace.She also advised retirees not to desire quick gains as fraudsters would make offers to defraud them of their benefits.

In this article:
Aliyu Magatakada Wamako
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