PenCom may raise bonds to offset accrued rights backlog

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Pencom building

The National Pension Commission through the Federal Government is trying to raise pension bonds through the Debt Management Office.

The bonds is to be used to offset the pension arrears of federal retirees, as a result of accumulated accrued rights.

A source in PenCom said: “The commission had been in talks with the DMO on how to raise the pension bonds to clear the pension arrears. While the discussion was still ongoing, the Federal Government said some of the funds should be released over a period of time.

“But as the funds have not been released, we are still trying to see the possibility of raising the pension bonds to clear the backlog.”

The Acting Director-General, PenCom, Mrs. Aisha Dahir-Umar, had stated that, it had been engaging the relevant authorities to ensure funding of the outstanding accrued right liabilities.

She disclosed that a submission was made to the Federal Government to consider issuance of bond through the DMO to fund the arrears as alternative to budgetary allocations.

PenCom stated that, “Section 39 (2) of the Pension Reform Act 2014 mandates the Federal Government to pay into the Retirement Benefits Bond Redemption Fund Account an amount not less than five per cent of the total monthly wage bill payable to employees in the public service of the federation towards the redemption of the accrued pension right of FGN retirees.

“However, in the last five years, budgetary funding/releases had not been regular and adequate for the payment of outstanding accrued pension rights over this period as a result of decline in government revenue.

In August 2019, the Federal Government had expressed its readiness to end delay in pension payment to the workers who transited to the Contributory Pension Scheme before retirement”.

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