PenCom plans more benefits for retirees in new scheme

The National Pension Commission (PenCom) has said the 50 per cent lump sum payable to retirees as gratuity on retirement from their Retired Saving Account (RSA) was reduced to enable retirees to earn more from the investment of their contributions.

The spokesperson for PenCom, Peter Aghahowa, made the clarification at the just concluded pre-retirement workshop for 2019 retirees at the University of Lagos, where more than 1,500 public servants from the ministries, department and agencies, including employees from the academic and the Nigerian Railway Corporation (NRC) were in attendance.

Aghahowa said the move became necessary following complaints by retirees that their monthly pension was too meagre to meet their obligations.

“Initially, retirees were entitled to 50 per cent of their RSA as lump sum (gratuity) after retirement, but because of complaints by retirees, PenCom reviewed the template to enable the retiree get 50 per cent of his last salary on retirement as his monthly pension.

“The monthly 50 per cent pension is calculated and deducted from the RSA and the balance is what is paid as gratuity to a retiree as gratuity,” he said.

Aghahowa said the percentage of the balance paid as gratuity could vary depending on the amount left after the retiree’s monthly pension had been taken care of.

According to him, the 50 per cent lump sum was reviewed by the commission in May this year through a revised template to Pension Fund Administrators (PFAs) to ensure that the retiree get 50 per cent of his last salary on retirement for some years.

On deductions from a retiree’s contribution, Aghahowa said PenCom could not “willfully deduct” from a retiree’s RSA balance, except on exceptional cases.

He said a retiree’s RSA balance could be deducted if the retiree’s contribution was wrongly computed.

“This denotes that the retiree was overpaid based on the initial document he submitted but on verification of his document, some irregularities were discovered.”

To ensure sanity in the system, Aghahowa said the commission would continue to monitor the PFAs and the Pension Fund Custodians (PFCs) effectively.

He added: “The commission inspects the PFAs and PFCs two times in a year and receives their investment returns daily or weekly. The commission could sanction or withdraw the operating licence of any PFA or PFC that errs.”

The Manager, Benefits and Insurance at the commission, Ifedapo Akinniyi, said retirees whose RSA balance could not guarantee 50 per cent of last monthly salary on retirement could get a minimum of 20 per cent as lump sum.

The Principal of Kings’ College, Lagos, Kolawole Isaac, who spoke on behalf of 2019 retirees, commended PenCom for organising the pre-retirement workshop, but decried a situation whereby pensioners wait for up to two years before receiving their gratuities.