President Muhammadu Buhari has appropriated a total of N501.19 billion to offset pension liabilities in the 2021 budget proposal.
He made this known during his 2021 Budget Speech: Budget of Economic Recovery and Resilience at The Joint Session of the National Assembly, Abuja last Thursday.
He stated that the budget would take care of pensions, gratuities and retirees’ benefits.
The Federal Government, the employer of civil and public servants, is owing retirees under the Contributory Pension Scheme (CPS) and Defined Benefit Scheme (DBS). They include the Nigeria Police, the Nigeria Custom Service, Nigeria Immigration Service, Nigeria Prisons Service, Civil Service and other parastatals.
The budgeted amount is below what is required to settle accrued liabilities for retirees under the CPS and long-standing liabilities of retirees under the DBS.
The liabilities range from 18 per cent pension contributions that has accrued for four years, accrued pension rights of up to one year and 33 per cent accrued rights of many years.
At present, the Federal Government is owing pension benefits of CPS retirees that retired since October.
Buhari said: “An aggregate expenditure of N13.08 trillion is proposed for the Federal Government in 2021. This includes N1.35 trillion spending by government-owned enterprises and grants and aid funded expenditures of N354.85 billion.
“For 2021, the proposed N13.08 trillion expenditure comprises non-debt recurrent costs of N5.65 trillion; personnel costs of N3.76 trillion; pensions, gratuities and retirees’ benefits of N501.19 billion; overheads of N625.50 billion; debt service of N3.124 trillion; statutory transfers of N484.49 billion; and sinking fund of N220 billion to retire certain maturing bonds.”