Home Finance NUP seeks gratuity for contributory retirees

NUP seeks gratuity for contributory retirees

by Emmanuel Ogundele
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The Nigeria Union of Pensioners (NUP) has urged the Federal Government to pay retirees under the Contributory Pension Scheme(CPS) their gratuities as it is done to their colleagues who are under the Defined Benefit Scheme (DBS).

The union spoke against the backdrop of agitations for 75 per cent lump sum payment by some retirees as against the 25 per cent  paid to them by Pension Fund Adminstrators (PFA) from their Retirement Savings Account (RSA) balances.

NUP’s Media and Publicity Secretary, Bunmi Ogunkolade, in an interview with The Nation, said the reasons for the agitation for the increment were that the CPS did not give room for the payment of gratuity by the government to retirees under the scheme.

He said this formed part of their position paper to the National Assembly during the recent public hearing by House of Representatives Committee on Pensions.

He said: “Let the government give retirees under this scheme gratuity as it is done to pensioners under the DBS.The agitation will be greatly reduced, if not totally suppressed.

 “This notwithstanding; and to be on a safer side, our Union recommended a 50-50 situation. Let the pensioners go home with 50 per cent of their savings while the balance will be paid monthly,” he added.

He stated that the Union believed that the withdrawal of minimum lump sum of 75 per cent from RSA, if allowed, would affect the scheme.

“It is as good as releasing the entire total sum to the pensioners upon retirement. The scheme is designed to assist pensioners to have something to fall back upon after retirement. If we go ahead to release virtually the entire savings to pensioners upon retirement, then the risk involved will be higher and the repercussion will be very severe.  There should be a balance between the lump sum withdrawal and the amount left to provide for monthly pensions.

“World statistics show us that only about five per cent of the world’s population are said to be rich while the rest 95 per cent are either of the middle class or poor. This parameter shows us obviously that only very few people in the society are gifted with money management skill.

“If per adventure, a pensioner goes home with 75 per cent of his entire savings and the money went down the drain possibly due to bad investment, poor business calculation, wrong visibility studies or any other reasons for that matter, where is the fall back position for such a pensioner and we will all come back to blame the government of the day,” he noted.

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