The National Pension Commission (PenCom) is in talks with the Debt Management Office (DMO) to offer pension bonds on behalf of the Nigeria Government in a bid to offset unpaid pension arrears
The Acting Director-General, PenCom, Aisha Dahir-Umar disclosed that the commission had been in contact with relevant authorities to secure funding for the outstanding accrued right liabilities but to no avail.
She added that the bonds when raised are expected to be used to offset the pension arrears of federal retirees, as a result of accumulated accrued rights.
“The commission had been in talks with the DMO on how to raise the pension bonds to clear the pension arrears. While the discussion was still ongoing, the Federal Government had said some of the funds should be released, but as the funds have not been released, we are still trying to see the possibility of raising the pension bonds to clear the backlog,” a source in PenCom said.
Dahir-Umar stated that as an alternative to budgetary allocations, which were not forthcoming, the commission had suggested to the Federal Government to consider issuance of bond through the DMO to fund the arrears.
The commission cited that according to “Section 39 (2) of the Pension Reform Act 2014 mandates the Federal Government to pay into the Retirement Benefits Bond Redemption Fund Account an amount not less than 5% of the total monthly wage bill payable to employees in the public service of the federation towards the redemption of the accrued pension right of FGN retirees.
However, in the last five years, budgetary funding/releases had not been regular and adequate for the payment of outstanding accrued pension rights over this period as a result of the decline in government revenue.
The Federal Government had in August 2019 expressed its readiness to put a stop to delay in pension payment to the workers who joined the Contributory Pension Scheme before retirement, The Nation reported.