The National Pension Commission has set out modalities for the administration of retirement benefits of professors and public office holders to earn their last salaries as pension under the Contributory Pension Scheme.
The details were contained in the guidelines for the administration of retirement benefits of professors and some categories of political appointees obtained by our correspondent.
Under section two of the guidelines, professors, who are to be entitled to pensions at a rate equivalent to their annual salaries upon retirement, must be academic staff who retired as professors after serving continuously up to the retirement age of 70 years in a university recognised by the National Universities Commission; or must have served a minimum of 20 years as a professor in a university recognised by the NUC and retired before attaining the age of 70 years.
Political appointees covered by the guidelines are heads of civil service of the federation and permanent secretaries who are appointed by the President, for the Federal Government and Federal Capital Territory; and by the governors for state Ministries Departments and Agencies, and are subject to retirement upon attaining the prescribed retirement age or length of service.
For political appointees such as heads of service and permanent secretaries, the guidelines specified that they must have been appointed from the Civil Service of the Federation or state civil service commissions with a minimum of 20 years of pensionable service.
PenCom noted that prior to the enactment of the Pension Reform Act, 2004, retiring heads of service of the federation and permanent secretaries were entitled to receive 100 per cent of their annual total emoluments as pension for life.
It added that the Universities Miscellaneous Provisions (Amendment) Act, 2012 provided that retiring professors would be entitled to pension at the rate equivalent to their annual salaries for life.
In recognition of the above provisions, Section 6(2) of the PRA 2014 mandates PenCom to issue guidelines to regulate the administration of retirement benefits of professors covered under the UMPAA 2012 and the category of political appointees entitled by virtue of their terms and conditions of employment to retire with full benefits provided that any shortfall shall be funded from budgetary allocations by the employers.
It added that the shortfall in the RSAs and the accrued rights of the eligible professors and political appointees would be funded from the Federal Government’s retirement benefit bond redemption fund account maintained by the Central Bank of Nigeria, which would be redeemed into their RSAs.
In the case of the states that have joined the CPS, it stated that the accrued rights of professors and political appointees would be funded from the state governments’ retirement benefit bond redemption fund, and that the employer or employee pension contributions should be deducted from the Consolidated Revenue Fund of the Federation or states and remitted to their RSAs.
According to the guidelines, in the event that the balance in the RSA runs out while the professor or political appointee is still alive, the employer shall bear the payment of the full retirement benefits.
PenCom stated that the provisions of the guidelines would apply to eligible professors and political appointees in the federal, FCT and states’ civil service.
The commission is also working on the implementation of minimum pensions for retirees with low monthly stipends under the CPS.
The Pension Reform Act, 2014 provides that PenCom should establish and maintain a fund to be known as the Pension Protection Fund in respect of the guarantee minimum pension.
According to the Act, funding of the minimum guaranteed pension will be partly obtained from an annual subvention of one per cent of the total monthly wage bill payable to employees in the public service of the federation and returns from pension fund investments.
It will also be funded from the annual pension protection levy paid by PenCom and all licensed pension operators at a rate to be determined by the commission from time to time.
The Chairman, Pension Fund Operators Association of Nigeria, Mr. Eguarekhide Longe, said the operators were ordered to pay three per cent of their management fees, while PenCom would also pay some fees to fund the minimum pension scheme.
Operators in the CPS had proposed a minimum pension payment of N14,400 to retirees as contained in the draft guidelines.
The draft guidelines on minimum pension, sent to PenCom by the operators, state that only workers who have contributed for a minimum of 15 years into their Retirement Savings Accounts will enjoy the minimum pension stipend.
The guidelines added that informal sector and casual workers must have contributed to their RSAs for 120 and 135 months, respectively before they can enjoy this privilege.
The initiative, according to the operators, will bring an end to the situation where retirees are paid abysmally low pensions or when the balances in their RSAs are very small, which makes them unable to receive stipends. – Punch.