PenCom, Finance Ministry collaborate on prompt payment of retiree benefits — DG
The National Pension Commission (PenCom) has announced that it is working closely with the Ministry of Finance to ensure the timely payment of retirees’ benefits.
This update was shared by the Director-General of PenCom, Omolola Oloworaran, during an interactive session with the media in Lagos.
In response to concerns about accrued rights and the delay in the payment of retirees’ benefits, the Director-General expressed optimism that the ongoing efforts would result in a resolution before the end of the year.
She explained, “I understand that many retirees are yet to be paid and are understandably asking why their contributions are not being released, which is a legitimate request. Unfortunately, the law does not permit PenCom to directly release these funds to them at this moment. The best we can do is to collaborate with the government to ensure that the accrued rights are paid.”
She further stated, “Additionally, there is a concern that if we pay retirees what they have contributed, the government may no longer feel the urgency to address the outstanding payments, which could potentially prolong the situation for years. Once pensioners receive their contributions, the pressure tends to ease, and the government may not prioritise the matter.”
Oloworaran assured that PenCom was committed to finding a long-term solution. “We are working with the Ministry of Finance, and we expect that by the end of the year, the first group of retirees under the Contributory Pension Scheme (CPS) will receive their benefits. We are focused on creating a lasting solution to ensure that retirees receive their entitlements within a month of retirement,” she said, expressing confidence that this goal would be achievable.
Since November 2023, approximately 18,000 retirees have not yet received their benefits, according to PenCom.
Regarding the annuity issue with African Alliance Insurance Company, Oloworaran confirmed that the company had been banned from selling annuities until they resolve the ongoing concerns. She explained that the Commission is working with the company to ensure that such issues do not occur again. “We are pleased that they have now made the required payments, and we want to work with them to prevent future problems. For now, we have banned them from offering annuities to anyone until we are certain they can meet their obligations,” she added. PenCom will collaborate with the National Insurance Commission (NAICOM) to determine potential penalties once a lasting solution is in place.
Oloworaran also reiterated that pension fund administrators will continue to invest in federal government securities, which are considered low-risk due to the government’s track record of meeting its financial obligations. “Pension funds globally contribute to national capital pools, and investing in government securities such as treasury bills and bonds is a standard practice, even in developed economies. In Nigeria, these investments currently offer returns that surpass other investment options,” she concluded.
