The House of Representatives is seeking to criminalise delay in the payment of pension to retirees. It is also proposing raising the amount due for withdrawal from their retirement savings accounts from the current 25 per cent to 75 per cent.

The House is also seeking a three-year imprisonment or N2m fine for any Pension Fund Administrator or Custodian, who fails to release the due pension to an account holder immediately after retirement, after the approval by the National Pension Commission.

These are being proposed in the Pension Reform (Amendment) Bill, 2020, sponsored by a member of the House from Ogun State, Mr Jimoh Aremu, which is awaiting second reading, a copy of which our correspondent obtained on Tuesday.

Under the Contributory Pension Scheme, an employee keeps an account with a PFA into which a part of their salary is jointly saved by the employee and the employer monthly.

According to PenCom, the minimum rate of contribution is 18 per cent of the employee’s monthly emoluments, where 10 per cent is contributed by the employer and 8 per cent is contributed by the employee.

Aremu, in the explanatory memorandum on the proposal, said, “This bill seeks to amend Sections 1(c), 7(2), 8(1), 18, 24, and 99 of the Pension Reform Act Cap P50 LFN 2014, by providing that a pensioner shall receive at least 75 per cent of his (or her) retirement benefits immediately upon retirement and criminalise the undue delay in the payment of pension.”

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The bill proposes an amendment to Section 1 (c) of the Act by deleting “receives his retirement benefits as and when due” and replacing it with “receives at least 75 per cent of his retirement benefits immediately upon retirement or disengagement.”

The amended section will now read, “(c) …ensure that person who worked in either the public service of the federation, Federal Capital Territory, states and local government or the private sector receives at least 75 per cent of his retirement benefits upon retirement, disengages (sic) or is disengaged.

Section 7(2) will now read, “Where an employee voluntarily retires, disengages or is disengaged from employment as provided for under Section 16 (2) and (5) of this Act, the employee may, with the approval of the commission, withdraw an amount of money not exceeding 75 per cent of the total amount credited to his retirement savings account.”