Retirees under the Contributory Pension Scheme will from early next year enjoy a minimum pension payment irrespective of the balance in their Retirement Savings Accounts. The Chairman, Pension Fund Operators Jimmy young forex of Nigeria, Mr. Eguarekhide Longe, disclosed this to our correspondent in an exclusive interview. The minimum pension is going to take up early next year.
Last year, operators of the scheme proposed a minimum stipend of N14,400 for each retiree in the draft guideline on the commencement of the minimum pension for retirees under the CPS. Longe, however, did not confirm if the minimum pension would remain the same amount. He noted that pension operators had a responsibility to make their own contribution to the fund to kick-start the payment of the minimum stipends, while the Federal Government would also have to pay its own contribution. 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 added that the informal sector and casual workers must have contributed to their RSAs for 120 and 135 months, respectively before they could enjoy this privilege. The initiative, according to the operators, will bring an end to the situation where retirees are paid abysmally low pensions or paid nothing when the balances in their RSAs are very small. Presently, the CPS and the old defined benefit pension scheme are in existence in the country. Pensioners under the defined benefit scheme have also been agitating for the payment of a guaranteed minimum pension.
Recently, the Nigeria Union of Pensioners proposed a minimum pension of N25,000 for retirees under the old defined scheme, but the Federal Government has yet to respond to the proposal. It needs to be pointed out that many pensioners under the defined benefits scheme receive less than N10,000 per month. This can never be regarded as a minimum or living pension. With the present economic situation in the country, no pensioner should be paid less than N25,000.
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