CPS: Professors, political appointees to earn full salaries as pension

The National Pension Commission has introduced guidelines that
will enable some categories of retirees under the Contributory
Pension Scheme to earn their last full salaries like their
counterparts in the old Defined Benefits Pension Scheme, NIKE
POPOOLA writes.

The National Pension Commission has set out modalities for the
administration of retirement benefits of professors and public
office holders to earn their last salaries as pension under the
Contributory Pension Scheme.

The details were contained in the guidelines for the
administration of retirement benefits of professors and some
categories of political appointees obtained by our
correspondent.

Under section two of the guidelines, professors, who are to be
entitled to pensions at a rate equivalent to their annual salaries
upon retirement, must be academic staff who retired as professors
after serving continuously up to the retirement age of 70 years in
a university recognised by the National Universities Commission; or
must have served a minimum of 20 years as a professor in a
university recognised by the NUC and retired before attaining the
age of 70 years.

Political appointees covered by the guidelines are heads of
civil service of the federation and permanent secretaries who are
appointed by the President, for the Federal Government and Federal
Capital Territory; and by the governors for state Ministries
Departments and Agencies, and are subject to retirement upon
attaining the prescribed retirement age or length of service.

For political appointees such as heads of service and permanent
secretaries, the guidelines specified that they must have been
appointed from the Civil Service of the Federation or state civil
service commissions with a minimum of 20 years of pensionable
service.

PenCom noted that prior to the enactment of the Pension Reform
Act, 2004, retiring heads of service of the federation and
permanent secretaries were entitled to receive 100 per cent of
their annual total emoluments as pension for life.

It added that the Universities Miscellaneous Provisions
(Amendment) Act, 2012 provided that retiring professors would be
entitled to pension at the rate equivalent to their annual salaries
for life.

In recognition of the above provisions, Section 6(2) of the PRA
2014 mandates PenCom to issue guidelines to regulate the
administration of retirement benefits of professors covered under
the UMPAA 2012 and the category of political appointees entitled by
virtue of their terms and conditions of employment to retire with
full benefits provided that any shortfall shall be funded from
budgetary allocations by the employers.

It added that the shortfall in the RSAs and the accrued rights
of the eligible professors and political appointees would be funded
from the Federal Government’s retirement benefit bond redemption
fund account maintained by the Central Bank of Nigeria, which would
be redeemed into their RSAs.

In the case of the states that have joined the CPS, it stated
that the accrued rights of professors and political appointees
would be funded from the state governments’ retirement benefit bond
redemption fund, and that the employer or employee pension
contributions should be deducted from the Consolidated Revenue Fund
of the Federation or states and remitted to their RSAs.

According to the guidelines, in the event that the balance in
the RSA runs out while the professor or political appointee is
still alive, the employer shall bear the payment of the full
retirement benefits.

PenCom stated that the provisions of the guidelines would apply
to eligible professors and political appointees in the federal, FCT
and states’ civil service.

The commission is also working on the implementation of minimum
pensions for retirees with low monthly stipends under the CPS.

The Pension Reform Act, 2014 provides that PenCom should
establish and maintain a fund to be known as the Pension Protection
Fund in respect of the guarantee minimum pension.

According to the Act, funding of the minimum guaranteed pension
will be partly obtained from an annual subvention of one per cent
of the total monthly wage bill payable to employees in the public
service of the federation and returns from pension fund
investments.

It will also be funded from the annual pension protection levy
paid by PenCom and all licensed pension operators at a rate to be
determined by the commission from time to time.

The Chairman, Pension Fund Operators Association of Nigeria, Mr.
Eguarekhide Longe, said the operators were ordered to pay three per
cent of their management fees, while PenCom would also pay some
fees to fund the minimum pension scheme.

Operators in the CPS had proposed a minimum pension payment of
N14,400 to retirees as contained in the draft guidelines.

The draft guidelines on minimum pension, sent to PenCom by the
operators, state that only workers who have contributed for a
minimum of 15 years into their Retirement Savings Accounts will
enjoy the minimum pension stipend.

The guidelines added that informal sector and casual workers
must have contributed to their RSAs for 120 and 135 months,
respectively before they can enjoy this privilege.

The initiative, according to the operators, will bring an end to
the situation where retirees are paid abysmally low pensions or
when the balances in their RSAs are very small, which makes them
unable to receive stipends.

The National Pension Commission has introduced guidelines that
will enable some categories of retirees under the Contributory
Pension Scheme to earn their last full salaries like their
counterparts in the old Defined Benefits Pension Scheme, NIKE
POPOOLA writes.

The National Pension Commission has set out modalities for the
administration of retirement benefits of professors and public
office holders to earn their last salaries as pension under the
Contributory Pension Scheme.

The details were contained in the guidelines for the
administration of retirement benefits of professors and some
categories of political appointees obtained by our
correspondent.

Under section two of the guidelines, professors, who are to be
entitled to pensions at a rate equivalent to their annual salaries
upon retirement, must be academic staff who retired as professors
after serving continuously up to the retirement age of 70 years in
a university recognised by the National Universities Commission; or
must have served a minimum of 20 years as a professor in a
university recognised by the NUC and retired before attaining the
age of 70 years.

Political appointees covered by the guidelines are heads of
civil service of the federation and permanent secretaries who are
appointed by the President, for the Federal Government and Federal
Capital Territory; and by the governors for state Ministries
Departments and Agencies, and are subject to retirement upon
attaining the prescribed retirement age or length of service.

For political appointees such as heads of service and permanent
secretaries, the guidelines specified that they must have been
appointed from the Civil Service of the Federation or state civil
service commissions with a minimum of 20 years of pensionable
service.

PenCom noted that prior to the enactment of the Pension Reform
Act, 2004, retiring heads of service of the federation and
permanent secretaries were entitled to receive 100 per cent of
their annual total emoluments as pension for life.

It added that the Universities Miscellaneous Provisions
(Amendment) Act, 2012 provided that retiring professors would be
entitled to pension at the rate equivalent to their annual salaries
for life.

In recognition of the above provisions, Section 6(2) of the PRA
2014 mandates PenCom to issue guidelines to regulate the
administration of retirement benefits of professors covered under
the UMPAA 2012 and the category of political appointees entitled by
virtue of their terms and conditions of employment to retire with
full benefits provided that any shortfall shall be funded from
budgetary allocations by the employers.

It added that the shortfall in the RSAs and the accrued rights
of the eligible professors and political appointees would be funded
from the Federal Government’s retirement benefit bond redemption
fund account maintained by the Central Bank of Nigeria, which would
be redeemed into their RSAs.

In the case of the states that have joined the CPS, it stated
that the accrued rights of professors and political appointees
would be funded from the state governments’ retirement benefit bond
redemption fund, and that the employer or employee pension
contributions should be deducted from the Consolidated Revenue Fund
of the Federation or states and remitted to their RSAs.

According to the guidelines, in the event that the balance in
the RSA runs out while the professor or political appointee is
still alive, the employer shall bear the payment of the full
retirement benefits.

PenCom stated that the provisions of the guidelines would apply
to eligible professors and political appointees in the federal, FCT
and states’ civil service.

The commission is also working on the implementation of minimum
pensions for retirees with low monthly stipends under the CPS.

The Pension Reform Act, 2014 provides that PenCom should
establish and maintain a fund to be known as the Pension Protection
Fund in respect of the guarantee minimum pension.

According to the Act, funding of the minimum guaranteed pension
will be partly obtained from an annual subvention of one per cent
of the total monthly wage bill payable to employees in the public
service of the federation and returns from pension fund
investments.

It will also be funded from the annual pension protection levy
paid by PenCom and all licensed pension operators at a rate to be
determined by the commission from time to time.

The Chairman, Pension Fund Operators Association of Nigeria, Mr.
Eguarekhide Longe, said the operators were ordered to pay three per
cent of their management fees, while PenCom would also pay some
fees to fund the minimum pension scheme.

Operators in the CPS had proposed a minimum pension payment of
N14,400 to retirees as contained in the draft guidelines.

The draft guidelines on minimum pension, sent to PenCom by the
operators, state that only workers who have contributed for a
minimum of 15 years into their Retirement Savings Accounts will
enjoy the minimum pension stipend.

The guidelines added that informal sector and casual workers
must have contributed to their RSAs for 120 and 135 months,
respectively before they can enjoy this privilege.

The initiative, according to the operators, will bring an end to
the situation where retirees are paid abysmally low pensions or
when the balances in their RSAs are very small, which makes them
unable to receive stipends.