The Nigerian Union of Pensioners (NUP) says the bill seeking to increase lump sum withdrawal of contributory pension to 75 per cent will not be in the interest of the retirees in the long run.
The President of NUP, Dr Abel Afolayan, said this in an interview with the News Agency of Nigeria (NAN) in Abuja on Monday.
The Pension Reform Act 2014 had stipulated 25per cent or 50 per cent lump sum withdrawal for would be retirees, depending on the amount contributed by the retiree.
However, concerned Nigerians and unions of contributory pensioners had advocated for an upward review of the lump sum withdrawal.
The agitation had resulted in the introduction of a bill in the Senate seeking an upward review to 75 per cent
Afolayan said the move to raise the lump sum withdrawal could result in a situation where the retirees that contributed little would exhaust their balance on time after the withdrawal.
Afolayan said:“ our take is that 75 per cent is too much, if you take 75 per cent lump sum, you will have 25 per cent left.
“And the 25 per cent will be spread over a number of years, look at me this is my 27th year in retirement. If you have 25 per cent left, and you exhaust it in 15 years or so, what happens after you exhaust the 25 per cent.
“That is why we are saying between 25 to 50 per cent lump sum is enough, it is adequate, and the balance of 75 or 50 per cent will spread over 20 years or more.
“Because if you say you will die quickly, look at that old man there, 30 years after retirement, imagine, if he was under Contributory Pension Scheme (CPS), and has exhausted his contribution, what will he fall back on.’’
Afolayan told NAN that the Federal Government had agreed to be paying five per cent of monthly salary bill to the Central Bank of Nigeria (CBN) to upset the accrued rights of retirees who retired in the Defined Benefit Scheme (DBS).
On moves and present debates to exclude some paramilitary organisations from the CPS, the NUP president said: “our position is that the Para-military should not exit the CPS, they should remain.
“Because over the years if they exit, government may find it difficult, if not impossible, to pay their entitlements.
“But when you contribute, they cannot deny you your contribution. All over the world, the trend now is contributory pension not government bearing pension benefits of workers.’’
On state and local government pensioners, he advised state governments to fully key in to the CPS to completely avert future challenge of non-payment of pension benefits of workers.
“Because of separation of powers, the Federal Government cannot fully dictate to states and local governments. What they need to do is for all the states to fully key into the CPS; both the states and local government.
“About 26 states have either keyed into it or either in the process of keying into the CPS.
“Jigawa was the first state and they are enjoying the benefits, Kaduna, Lagos are already in, so we are pleading with all the states and local governments to do same.
“That is why we are in support of local government autonomy,’’ Afolayan said.