Workers have continued to suffer decline in their retirement benefits over the Federal Government’s delay in implementing the mandatory 18 per cent monthly emolument remittance into employees’ pension accounts, NIKE POPOOLA reports.
The Pension Reform Act 2014 mandates all employers under the Contributory Pension Scheme to raise the contribution of their workers’ pensions from 15 per cent of total monthly emoluments to 18 per cent.
The law was amended to address complaints of workers who were retiring but getting ridiculously low monthly stipends because of low balances in their Retirement Savings Accounts.
According to the PRA, eight per cent of the workers’ monthly emolument should be deducted and augmented with another 10 per cent contribution from the employer to be regularly remitted into the workers’ RSA.
The contributions, which are kept by the Pension Fund Custodians, are administered and invested by the PFAs.
Provisions were made in the PRA for the PFAs to continually invest the funds on behalf of the workers to ensure that the funds continue to increase until the workers retired, which will further translate into higher returns on investments and give retirees higher monthly stipends.
But while many private sector employers have complied, the Federal Government has continued to remit the old amount of 15 per cent into the workers’ RSAs six years after the enactment of the PRA 2014.
Findings also revealed that the Federal Government owed remittances of some parastatals for many months.
The implication of this, according to experts, is that many workers will still retiree with low savings or retire into penury.
One of the operators who spoke to our correspondent on condition of anonymity said due to insufficient funding of accrued rights, federal workers who had been retiring since April 2019 had not been able to get paid.
He said, “The workers who retired since April 2019 have not been paid their pension benefits because the Federal Government has not yet paid their accrued pension rights.
“The Federal Government only paid three months of January to March 2019 accrued rights of the retirees. So it is only those who retired latest in March 2019 that are on pension payroll.
“For the present workers, the Federal Government is still remitting 15 per cent into their RSA instead of 18 per cent.”
A former President, Trade Union Congress, Peter Esele, said those in authority should be a standard for the respect of the country’s laws, and the labour unions should mount pressure on the government to do what is right.