The Federal Government has paid a total of N980.18 billion to retirees of Treasury-funded ministries, departments and agencies since the establishment of the contributory pension scheme in 2004 until December 2021.
The Chief Executive of the National Pensions Commission, Aisha Dahir-Umar, revealed this in her report on the pension sector for 2021.
She said: “In addition, the Federal Government continued to fund the Bond Repayment Fund Account for Retirement Benefits. Together with the release of N100.29 billion for the payment of accrued rights to pensioners of Treasury-funded MDAs, this brought the total amount released by the Federal Government to the RBBRF account, from its inception on December 31, 2021, to N980.18 billion.
According to her, the most significant development in the pension industry in 2021 was the successful reduction of outstanding federal government pension liabilities under the contributory pension plan.
She said PenCom had secured presidential approval for N159.46 billion to cover some aspects of the federal government’s unpaid pension liabilities under the CPS.
As a result, she said, 40.55 billion naira, or the current accruals of 6,282 retirees and 2,329 deceased employees, were paid out during the year.
She added that N66.83 billion was paid into the pension savings accounts of 85,743 retirees and 693,229 active employees, representing the 2.5% shortfall in the employer’s pension contribution rate in December 2021.
The balance of N52.08 billion was processed in FY2022, she noted.
Dahir-Umar said, “The industry has remained focused on addressing the challenges of the federal government’s ongoing pension commitments under the CPS, expanding CPS coverage to the informal sector and sub-national governments and diversification of pension funds. investment.
“Other areas of focus included a focus on improving the quality of customer service delivery, building the operational capacity of the regulators/operators workforce, and reinvigorating information and public education committee.”
She said the industry remained focused on addressing the challenges of outstanding federal government pension liabilities under the CPS, expanding CPS coverage to the informal sector, subnational governments, and diversifying pension fund investments.
PenCom Chairman Dr Oluremi Oni said that during the year under review, the agency continued to further diversify pension fund portfolios by stepping up efforts to ensure sustained investment of funds funds in structured infrastructure projects that met the strict requirements set out in the regulation of the investment of pension fund assets.
He said: “We are pleased to report that of the N8.77 billion or 65.35% of total pension assets under management invested in Federal Government securities, pension funds directly invested N118, N31 billion in the Sukuk bond issued by the federal government to finance road projects nationwide, N59.32 billion was invested in FGN green bonds, while N14.30 billion was invested in invested in agency bonds issued by the Nigeria Mortgage Refinance Company.
He said that while PenCom’s efforts to diversify pension fund investments and hedge against inflation had gradually begun to yield results, efforts were underway to ensure that annualized average pension fund rates of return pension through RSA and inherited funds were higher than inflation rates.