FG Begins Payment of Outstanding Pension Increases — PenCom Explains How Retirees Will Benefit

By Fasaha Stream Newsroom

The National Pension Commission (PenCom) has explained how the funds recently released by the Federal Government will be shared among retirees under different pension schemes.

According to PenCom, the money is meant to clear all outstanding pension increases, including the 15% (2007), 33% (2010), 20% and 28% (2024) increments, as well as the 2019 consequential adjustment and the ₦32,000 minimum wage pension award.

How the Payment Will Work

PenCom directed Pension Fund Administrators (PFAs) to divide the total pension increase into two equal parts:

1. 50% Lump Sum Payment:

Retirees will receive this part directly into their bank accounts as a one-time cash payment.

2. 50% Pension Adjustment:

The remaining half will be used to increase retirees’ monthly or quarterly pension, depending on their benefit type.

Categories of Beneficiaries

PenCom outlined how each group of retirees will be affected:

1. Retirees on Programmed Withdrawal (PW):

• After receiving their 50% lump sum, PFAs will adjust their monthly pension upward with the other 50%.
• If the adjustment reduces the pension, PFAs will use a special “Additional Benefits Template (ABT)” to ensure no reduction occurs.
• If the adjustment increases the pension, the full benefit will be added to their monthly or quarterly payments.

2. Retirees Paid from the Pension Protection Fund:

• These retirees will only get the 50% increase meant for pension adjustments, not a lump sum. Their PFAs will send their data to PenCom for computation.

3. Retirees Who Collected RSA ‘En Bloc’:

Those who withdrew their entire savings at retirement will also benefit. However, if the 50% increase cannot guarantee them at least one-third of the minimum wage monthly, PenCom says they will collect the remaining balance in full, “en bloc.”

4. Retirees on Retiree Life Annuity (RLA):

• If their 50% increase is below ₦100,000, it will be paid directly into their bank accounts.
• If it is above ₦100,000, it will be added to their annuity to boost their monthly or quarterly pension.

5. ₦32,000 Minimum Wage Pension Award:

• All retirees on both Programmed Withdrawal and Retiree Life Annuity will receive a ₦32,000 payment, either as a lump sum or as accumulated arrears, depending on their PFA’s processing timeline.

Payment Timeline

PenCom instructed PFAs to:

• process all necessary documents immediately, and
• credit retirees’ bank accounts within 10 working days after receiving the funds.

What Retirees Should Expect

1. A lump sum payment (first 50%).

2. An increase in monthly pension (second 50%).

3. Special rules for annuity holders depending on the amount involved.

4. Full payment for those who earlier withdrew “en bloc” if their increase is too small.

5. ₦32,000 minimum wage award for all eligible retirees.

PenCom assured retirees that the new payments will begin to reflect soon after PFAs complete their internal processing.