The Federal Government of Nigeria, says it would issue bonds worth 758 Billion Naira to clear accumulated pension debts.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, made this known while briefing reporters, revealing that the fund would be used to clear debts owed under the old Defined Benefit Scheme before the introduction of the Contributory Pension Scheme in 2004.
He said after considering plans to address outstanding pension liabilities, FG, through the Debt Management Office, will issue bonds of about N758bn to clear accumulated pension debts owed under the old Defined Benefit Scheme.
According to Edun, “An equally important issue of social interventions is pensions. There was approval for the government, through the Debt Management Office, to raise a Federal Government Bond of about N758bn.
These liabilities, he explained, accumulated over the years due to periodic wage increases, and clearing them will grant long-overdue relief to affected pensioners.
“That is to clear up the backlog of pension liabilities owed various categories of pensioners who are owed funds under the defined benefit system that preceded the defined contributions, the Contributory Pension Scheme that came into force in 2004 and was updated with a new act in 2014.
“There were some accrued liabilities which were building up over time. So, for example, someone who was on the defined benefit scheme yet to retire would need a top-up of their contributions or the amount due to them every time there was a wage increase, every five years or so. So, this liability built up to a point where it would not be easy to pay them down on an ongoing basis.
“So, to clean up that critical area and to give people their right, which is the payment of their pension liabilities as and when due, the government has put in place an approval for Debt Management Office to raise N758bn that will pay down all these liabilities and of course, be a tremendous relief to the beneficiaries.”
