FG Yet to Pay Revised Pension Rate –PenCom

• FG Yet to Pay Revised Pension Rate

About three years after the Pension Reform Act 2014 mandated an upward review of the amount required by employers to be contributed into the Retirement Savings Accounts of their employees with their Pension Fund Administrators, the Federal Government is yet to comply with the regulation.

Under the PRA 2004, employers were required to deduct 7.5 per cent of the workers’ monthly remuneration and add another 7.5 per cent, which should be paid into each employee’s RSA not later than seven days after the salary was paid.

Ten years after, the law was amended and replaced with the PRA 2014.

The law raised the employee’s and employer’s contributions to eight per cent and 10 per cent, respectively of the total monthly emolument of the worker, thus putting the total contribution at 18 per cent instead of the previous 15 per cent.

The National Pension Commission expressed worry that the Federal Government had yet to implement the 18 per cent pension contributions as revised by the PRA 2014.

PenCom said it was important for the Federal Government to ensure adequate appropriation under its recurrent expenditure in order to facilitate the implementation of the new pension contributions rate.

The commission stressed the need for the government to adequately appropriate funds for the payment of its pension liability under the Contributory Pension Scheme.