Nigerian Pensioners Face Delays Due to Unpaid Government Obligations
Nigeria’s Pension Fund Administrators (PFAs) are facing mounting pressure from retirees due to the federal government’s delay in paying accrued pension rights. This has left many new retirees without access to their pensions, despite having contributed funds throughout their careers.
The root of the problem lies in unpaid accrued pension benefits owed to federal government employees who transitioned into the Contributory Pension Scheme (CPS) in 2004. These benefits are based on their service years before the scheme’s inception.
The last payment for accrued pensions came in 2022, leaving a significant backlog for those who retired in 2022 and 2023. This has caused frustration among retirees who are unable to access their funds, leading to finger-pointing at PFAs.
“Retirees are not fully aware of Section 2.3 of the Revised Regulation on the Administration of Retirement/Terminal Benefits,” explained Ugwu Oluwakemi, CEO of Nigerian University Pension Management Company. “This regulation states that accrued rights must be paid by the employer, not the PFAs.”
The delay in receiving pensions has a human cost, according to Oluwakemi. “This waiting period deprives retirees of access to healthcare, leading to preventable deaths,” she said. “The life expectancy in Nigeria is already low, and this delay only exacerbates the problem.”
Lawmakers are taking notice. Olumide Lateef, a member of the House of Representatives on Pensions, emphasized the importance of resolving accrued rights issues for the scheme’s success.
“We need to ensure people have access to their pensions upon retirement,” Lateef stated.
Solutions are being proposed. Oluwakemi recommends establishing a dedicated pension reserve fund specifically for accrued rights payments. This fund would require sustainable funding sources, potentially coming from a portion of tax revenues or special levies. Legislation mandating regular contributions to the fund and outlining clear management and disbursement rules is also seen as crucial.
The Nigerian government must act swiftly to address this issue and ensure timely access to pensions for retirees. Only then can the Contributory Pension Scheme fulfill its core objective of financial security for those who have served their country.
