KEY POINTS
- PenCom extended the One Time Online Verification and Enrolment Exercise deadline to Dec. 31.
- The exercise was initially scheduled to close on July 31.
- Only 31,099 employees had completed enrolment out of an estimated 150,000 eligible Federal Government employees.
- The exercise is designed to determine pension rights inherited from the former Defined Benefit Scheme.
- Eligible employees who have not completed the process have been urged to do so before the new deadline.
MAIN STORY
The National Pension Commission has extended the deadline for employees of treasury funded Federal Government Ministries, Departments and Agencies to complete the mandatory One Time Online Verification and Enrolment Exercise to Dec. 31.
The exercise, which began in February, was originally scheduled to end on July 31. PenCom said the extension followed requests from several MDAs for additional time to enable more eligible employees to complete the digital process.
The commission also cited low participation as a factor behind the extension.
As of July, MDAs had uploaded 62,320 records covering active employees and retirees, but only 31,099 employees had successfully completed enrolment. The figure remains significantly below the estimated 150,000 active Federal Government employees entitled to accrued pension rights.
PenCom urged employees who had not started the process, as well as those who began but did not complete it, to use the additional time to finish their enrolment.
The exercise is intended to establish the accrued pension rights of employees who moved from the Defined Benefit Scheme to the Contributory Pension Scheme in 2004.
Under Section 15(1) of the Pension Reform Act 2014, eligible employees are entitled to pension and gratuity benefits earned from their first appointment up to June 30, 2004.
PenCom said the value of these accrued rights is determined through an actuarial valuation process and is necessary for establishing the Federal Government’s outstanding pension liabilities.
The commission said determining the liabilities would also enable government to make appropriate budgetary provisions for settling them.
The exercise is being conducted digitally through PenCom’s Contributions and Bond Redemption Application, known as COBRA, which is used for data capture, validation and processing.
Under the process, treasury funded MDAs upload the records of eligible employees to COBRA. The affected employees then visit their respective Pension Fund Administrators with the required documents to complete the enrolment.
PenCom said the Head of Civil Service of the Federation had also directed treasury funded MDAs through an April 27 circular to support the exercise and ensure eligible employees completed the required enrolment.
The commission said timely completion would facilitate the calculation of accrued pension rights and the release of the funds required to settle the liabilities.
Once funded, the accrued benefits will be credited to the affected employees’ Retirement Savings Accounts, allowing the funds to earn investment returns before retirement.
PenCom said Pension Desk Officers trained by the commission would continue coordinating the process within MDAs and assisting employees with enrolment.
It added that it would work with MDAs, Pension Fund Administrators and other stakeholders to improve awareness and participation before the new deadline.
THE ISSUES
- The low completion rate remains a major challenge, with only 31,099 employees completing the process against an estimated 150,000 eligible Federal Government employees.
- Accurate enrolment is important because the exercise provides the data needed to establish the government’s outstanding pension obligations to employees who transitioned from the former pension scheme.
- The digital nature of the process means successful completion depends not only on MDA data uploads but also on eligible employees completing their individual verification with their Pension Fund Administrators.
- The determination and funding of accrued pension rights have budgetary implications for the Federal Government, making accurate records important for establishing the amount required for settlement.
- The additional time provides an opportunity to improve participation, but eligible employees who delay completion could continue to face uncertainty over the determination and funding of their accrued benefits.
WHAT’S BEING SAID
“The commission urged eligible employees who were yet to enrol, as well as those who had started but not completed the process, to take advantage of the extension.” – PenCom
“The funds would subsequently be credited to the employees’ Retirement Savings Accounts (RSAs) ahead of retirement, enabling the funds to earn investment returns and boost retirement benefits.” – PenCom
WHAT’S NEXT
PenCom will continue working with treasury funded MDAs, Pension Fund Administrators and Pension Desk Officers to increase participation and complete the verification exercise before Dec. 31.
Eligible employees who have not completed the process are expected to submit the required documents to their respective Pension Fund Administrators after their records have been uploaded by their MDAs.
BOTTOM LINE
PenCom has given eligible treasury funded Federal Government employees until Dec. 31 to complete the pension verification exercise. The extension is intended to address low participation and improve the accuracy of the government’s outstanding accrued pension liabilities.
