FG Owes Retirees N143bn, says PenCom

• FG Owes Retirees N143bn, says PenCom

The National Pension Commission on Thursday said that the Federal Government owed a total of N142.6bn in pension liabilities to retired workers from 2014 to 2016.

The Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, disclosed this in a memorandum submitted to the Senate Committee on Establishments and Public Service at the 2017 budget defence session.

A copy of the memorandum was made available to our correspondents.

The DG expressed worry over the inability of the government to adequately fund the Retirement Benefits Bond Redemption Fund Account, adding that the development had left huge liabilities in the payment of pensions to retirees.

For instance, she said in 2014, the commission requested for a provision of N93.06bn based on the 11,010 verified and enrolled Federal Government employees scheduled to retire that year as well as estimates for deceased employees.

However, she noted that only N30.58bn was approved, thus resulting in a shortfall of N62.48bn in the 2014 fiscal period.

Anohu-Amazu informed the committee that the monthly mandates of N2.54bn for four months (September to December 2014), amounting to N10.19bn, were not cash-backed and released into the RBBRF account by the Office of the Accountant-General of the Federation after the Budget Office of the Federation had issued the “approval-to incur-expenditure” for that purpose.

In the 2015 fiscal period, the PenCom DG said the commission had, based on the data obtained on the Federal Government employees retiring that year and the death benefits claims as of September 2015, determined the government’s pension liability of N98.7bn for 13,799 retirees and estimates for deceased employees.

However, she lamented that only N60.25bn was appropriated in the 2015 budget for the purpose, thus resulting in another shortfall of N38.45bn for the retirees and deceased employees.

For the 2016 fiscal year, she said the commission requested for the provision of N91.91bn in the Appropriation Act based on 16,267 verified and enrolled government employees scheduled to retire within the year as well as estimates for deceased employees.

However, she stated that N50.19bn was presented before the National Assembly by the Budget Office, thereby resulting in a shortfall of N41.71bn.

She lamented that out of the approved N50.19bn, only N18.82bn, which was the mandate for four and half months, was released into the RBBRF account.

This, according to her, implies that mandates for seven and half months in the sum of N31.37bn were not cash-backed by the Accountant General of the Federation.

Anohu-Amazu said, “The distinguished Senate Committee on Establishment and Public Service is further requested to consider and ensure the appropriation of adequate funds to facilitate the payment of the sum of N10,194,184,608 to pay all outstanding accrued benefits for deceased and mandatory retirees of the Federal Government for the period September to December 2014.

“The sum of N41,719,090,082, being the shortfall in the 2016 budget appropriation. The sum of N31,372,380,576, being the outstanding mandates for seven and half months in 2016 in order to effect payment of outstanding accrued benefits for deceased and mandatory retirees of the Federal Government.

“The appropriation of the total sum of N113,023,255,000 in the 2017 Appropriation Act in favour of the Retirement Benefits Bond Redemption Fund Account being the accrued benefits due to 16,267 retirees/prospective retirees and estimates for deceased employees for the year 2017.”

The PenCom DG stated that there was a need to ensure adequate appropriation under the Federal Government’s recurrent expenditure this year so as to facilitate the implementation of the 18 per cent rate of pension contributions.