Budget: FG appropriates N536bn for retirement benefits in 2020

 

Budget: FG appropriates N536bn for retirement benefits in 2020

The Federal Government intends to spend N536.76 billion to pay pension, gratuities and retirement benefits in 2020.

This is contained in the 2020 budget currently undergoing consideration at the National Assembly.

A breakdown of the budget shows that N48.90 billion has been proposed for the Head of Civil Service to sort out civil pension, being N2.30 billion gratuity, N46.47 billion for pension and N130 million for running cost.

The budget provided N217.59 billion for the Military Pensions and Gratuities with N126.49 billion for the payment of pension.

N17.92 billion has been proposed for expected military retirees while N23.19 billion set aside for death benefits payments.

For military pensions, N150 million has been budgeted for administrative charges/running cost, N43.80 billion for arrears of 2017  and N4.78 billion for arrears of 2017.

The budget also made provision for the healthcare of military retirees with N10.48 billion appropriated for National Health Insurance Scheme (NHIS), including N5.95 billion for the arrears of 2014 to 2018.

A total of N400.26 million was budgeted for the pension and gratuity of retired staff of the Defence Intelligence Agency (DIA), including N30.27 million to clear the 2018 pension arrears, N66.09 million for pension, N270.30 million for gratuity, N3.59 million for 2018 gratuity arrears and N30 million for administrative charges.

For Police pensions and gratuities, N7.41 billion was budgeted, comprising N7.31 billion for pension and N100 billion as pension running cost.

A provision of N8.31 billion has been proposed for Customs, Immigration and Prisons Pension Office, out of which N8.21 billion is for pension and N100 million is for pension running cost.

N13.63 billion has also been appropriated for universities pension, including arrears while N26.76 billion has also been set aside for Parastatals Pension and Railway Pensions.

A budget of N13.16 billion has been proposed for the Department of State Security to pay N9.01 billion as pension, N3.89 billion for gratuity and N266.26 billion for death benefits while a budget of N4.37 has been proposed for Nigeria Intelligence Agency for pension and pension running cost in 2020.

The Federal Government also appropriated N168.83 billion for the payment of other pension benefits, including N23.88 billion for payment of arrears of pension liabilities, N17.16 billion for arrears of 33 per cent increase in pension rates, N89.55 billion for payment into redemption fund and N10 billion for Pension Protection Fund.

N4.50 billion has been appropriated for benefits of retired Heads of Service and Permanent Secretaries and Professors, N1 billion for severance benefits to retired heads of government agencies and parastatals, N2.3 billion for entitlements of former Presidents/Heads of States and Vice Presidents/Chiefs of General Staff, N16.57 billion for payment of outstanding terminal benefits of Nigeria Airways Ex-Workers.

The budget also made provisions of N3.88 billion for arrears for vehicles for retired/discharged personnel for 2017, 2018 and 2019).

Recall that recently, President Muhammadu Buhari recently started a process aimed at ending delays in the payment of the retirement benefits of Federal Government retirees who transited to the Contributory Pension Scheme (CPS) before retirement.

The President directed the Minister of Finance, Budget and National Planning, Zainab Ahmed, to appropriate and release in full a total of N62.83 billion to clear backlog of accrued pension rights of retirees in the next three years.

A letter signed by the President’s Chief of State, Abba Kyari, directed the Budget office of the Federation to include N12.83 billion, N25 billion and another N25 billion in the budgets of 2020, 2021 and 2022 respectively to settle the outstanding accrued pension rights of Federal Government employees.

The President also further directed the Finance Minister to ensure that the funds are fully released upon passage of the relevant Appropriation Bills.

He also directed the Minister to ensure “going further that adequate provisions are made in the annual Appropriation for accrued pension rights and funds are fully released upon approval of the Budget.”

The development was obviously meant to clear the shortfall of N62.83 billion created in the 2017 budget for the payment of accrued pension rights.

The shortfall resulted in a backlog of unpaid retirement benefits of Federal Government retirees under the CPS for 11 months.

The delay contradicts the 2014 Pension Reform Act, which provides that if an employee retires at the age of 50 years or more he or she can have immediate access to the retirement benefits in the Retirement Savings Account (RSA).

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    Budget: FG appropriates N536bn for retirement benefits in 2020

     

    Budget: FG appropriates N536bn for retirement benefits in 2020

    The Federal Government intends to spend N536.76 billion to pay pension, gratuities and retirement benefits in 2020.

    This is contained in the 2020 budget currently undergoing consideration at the National Assembly.

    A breakdown of the budget shows that N48.90 billion has been proposed for the Head of Civil Service to sort out civil pension, being N2.30 billion gratuity, N46.47 billion for pension and N130 million for running cost.

    The budget provided N217.59 billion for the Military Pensions and Gratuities with N126.49 billion for the payment of pension.

    N17.92 billion has been proposed for expected military retirees while N23.19 billion set aside for death benefits payments.

    For military pensions, N150 million has been budgeted for administrative charges/running cost, N43.80 billion for arrears of 2017  and N4.78 billion for arrears of 2017.

    The budget also made provision for the healthcare of military retirees with N10.48 billion appropriated for National Health Insurance Scheme (NHIS), including N5.95 billion for the arrears of 2014 to 2018.

    A total of N400.26 million was budgeted for the pension and gratuity of retired staff of the Defence Intelligence Agency (DIA), including N30.27 million to clear the 2018 pension arrears, N66.09 million for pension, N270.30 million for gratuity, N3.59 million for 2018 gratuity arrears and N30 million for administrative charges.

    For Police pensions and gratuities, N7.41 billion was budgeted, comprising N7.31 billion for pension and N100 billion as pension running cost.

    A provision of N8.31 billion has been proposed for Customs, Immigration and Prisons Pension Office, out of which N8.21 billion is for pension and N100 million is for pension running cost.

    N13.63 billion has also been appropriated for universities pension, including arrears while N26.76 billion has also been set aside for Parastatals Pension and Railway Pensions.

    A budget of N13.16 billion has been proposed for the Department of State Security to pay N9.01 billion as pension, N3.89 billion for gratuity and N266.26 billion for death benefits while a budget of N4.37 has been proposed for Nigeria Intelligence Agency for pension and pension running cost in 2020.

    The Federal Government also appropriated N168.83 billion for the payment of other pension benefits, including N23.88 billion for payment of arrears of pension liabilities, N17.16 billion for arrears of 33 per cent increase in pension rates, N89.55 billion for payment into redemption fund and N10 billion for Pension Protection Fund.

    N4.50 billion has been appropriated for benefits of retired Heads of Service and Permanent Secretaries and Professors, N1 billion for severance benefits to retired heads of government agencies and parastatals, N2.3 billion for entitlements of former Presidents/Heads of States and Vice Presidents/Chiefs of General Staff, N16.57 billion for payment of outstanding terminal benefits of Nigeria Airways Ex-Workers.

    The budget also made provisions of N3.88 billion for arrears for vehicles for retired/discharged personnel for 2017, 2018 and 2019).

    Recall that recently, President Muhammadu Buhari recently started a process aimed at ending delays in the payment of the retirement benefits of Federal Government retirees who transited to the Contributory Pension Scheme (CPS) before retirement.

    The President directed the Minister of Finance, Budget and National Planning, Zainab Ahmed, to appropriate and release in full a total of N62.83 billion to clear backlog of accrued pension rights of retirees in the next three years.

    A letter signed by the President’s Chief of State, Abba Kyari, directed the Budget office of the Federation to include N12.83 billion, N25 billion and another N25 billion in the budgets of 2020, 2021 and 2022 respectively to settle the outstanding accrued pension rights of Federal Government employees.

    The President also further directed the Finance Minister to ensure that the funds are fully released upon passage of the relevant Appropriation Bills.

    He also directed the Minister to ensure “going further that adequate provisions are made in the annual Appropriation for accrued pension rights and funds are fully released upon approval of the Budget.”

    The development was obviously meant to clear the shortfall of N62.83 billion created in the 2017 budget for the payment of accrued pension rights.

    The shortfall resulted in a backlog of unpaid retirement benefits of Federal Government retirees under the CPS for 11 months.

    The delay contradicts the 2014 Pension Reform Act, which provides that if an employee retires at the age of 50 years or more he or she can have immediate access to the retirement benefits in the Retirement Savings Account (RSA).

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