A pension manager, Mrs Olabisi Salami, has urged workers to embrace the Contributory Pension Scheme (CPS) of 2004 to ensure happy retirement life.
Salami, a Relationship Manager at Pensions Alliance Ltd., (PAL), gave the advice on Tuesday while speaking with the News Agency of Nigeria (NAN) in Ijebu-Ode.
According to her, the 2004 Pension Reform Act came into being to reduce to the barest minimum the difficulties usually encountered by retirees with the old Defined Benefit Pension Scheme (DBPS).
She said that the most interesting aspect of the new scheme was that it checked fraud and embezzlement that was fraught in the old scheme, where employers had direct access to pension funds.
Salami said that the new CPS was transparent as it allowed workers to monitor the balances on their Retirement Savings Accounts (RSA) with their choice of Pension Fund Administrator (PFA) anytime they desired.
“With the new pension scheme, every pensioner is expected to be paid or allowed to withdraw a lump sum of money from his account on retirement.
“This is done leaving enough in the account to enable the retiree receive an amount that will not be less than 50 per cent of the last monthly salary he received on a regular basis.
“Retirees, under the CPS receive their retirement benefits upon successful completion of the documentation process and are paid based on the balances in their RSA.
“For retirees having below N550,000, they are paid in bulk while those with balances above N550,000 receive a lump sum payment and are placed on programmed withdrawals based on the retirees’ decision,“ Salami said.
She said that what the law had achieved was to put guidelines in place to ensure that every Nigerian was assured of a financially secured future.
Salami, however, said that employees in the public service prior to 2004 would have their RSAs consolidated upon retirement.
“This consolidation shall involve transferring all pension payments prior to 2004 and their gratuity into their RSAs.
“Also for every public sector worker, either in service before or after 2004, the National Pension Commission (PenCom) ensures that their RSAs are properly consolidated,’’ she said.
She said that by working with their employers, each retiree’s RSA was reconciled to ensure all outstanding pension payments yet to be remitted as at retirement was implemented before paying the benefits.
On the part of the employers, Salami said they needed to consistently send the updated nominal roll to PenCom for adequate reconciliation.
“Lets not forget that the retiree’s fund is not lying idle, but is constantly being invested wisely and safely.
“Also determination of what the retiree will enjoy as monthly pension has been calculated on the basis of an expected life span for both males and females which is pegged at 82 and 84 years respectively.
“But superseding all these is the fact that the Pension Act has put in place the minimum guaranteed pension which ensures retirees get their pension payments for as long as they live,’’ he said.
Salami advised the Federal Government to ensure that Nigerian workers took full advantage of the scheme through enlightenment campaigns, workshops and media sensitisations.
She said that this would help alleviate the suffering and poverty that was synonymous with retirement.
(NAN)
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