The Pension Transitional Arrangement Directorate (PTAD) has clarified the 20 per cent and 28 per cent increases for last year.
The implementation followed a circular titled: (SWC/S/04/S.557/T/171) from the National Salaries, Incomes and Wages Commission (NSIWC) dated July 8, last year.
The Directorate explained that the changes in pensioners’ monthly pensions were as a result of the reimplementation of the Consequential Pension Adjustment (CPA), in accordance with directives from NSIWC last July.
Executive Secretary, Tolulope Odunaiya explained that in May 2021, PTAD had implemented the approved Consequential Pension Adjustment (CPA), following the increase in the National Minimum Wage of April 2019, based on a circular (SWC/S/04/S.542/II/298) from NSIWC dated April 28, 2021.
She stated that upon receiving the circular, PTAD promptly implemented the adjustment and paid the accumulated arrears for two years, using budgeted funds and savings.
According to her, the implementation of the CPA and the arrears was calculated using Pension Pay Bands, as recommended by the Technical Sub-Committee (TSC) for pension review in line with the 2019 National Minimum Wage.
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She said: “The TSC’s recommendation aimed to improve the welfare of pensioners at the lower end of the pension scale. This approach significantly reduced the percentage of pensioners receiving less than N10,000 monthly, from 27 per cent to 2per cent, while increasing the number of pensioners receiving up to N30,000 monthly, from 32per cent to 48per cent.
“After the implementation, PTAD received various complaints from pensioners and pension unions regarding the accuracy of the implementation. In response to these concerns, PTAD sought clarification from NSIWC about the implementation model.
“NSIWC’s response, via a letter dated 8th July 2024, clarified that the 2019 CPA should be applied based on Grade Levels, using the specific figures provided for each Grade Level. The letter also exempted defunct, commercialised, and privatized agencies from the increment, except for those who retired under the listed Salary Structure outlined in the circular. Following this clarification, PTAD engaged with pension union executives and relevant stakeholders to communicate these changes and ensure a smooth implementation.”
Odunaiya further explained that the revised approach was adopted in the August 2024 monthly pension payments.
“As expected, some pensioners who previously benefited from the Band-based method saw their pensions change due to the switch to the Grade Level method, resulting in a reduction for some and an increase for others.
“It is important to note that the 2024 20%/28% pension increment was calculated using the Grade Level-adjusted 2019 CPA for agencies whose salary structure was enumerated in the circular. Therefore, the adjustment depends on the re-computed 2019 CPA, based on grade levels.
“PTAD reminds all stakeholders that it is a Government Agency tasked with implementing Government Policies and Directives”.
The ES reaffirmed that the welfare of pensioners remains its utmost priority, in line with its mandate under the Pension Reform Act (PRA) 2014 and its day-to-day operations.
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