The Pension Fund Operators Association of Nigeria (PenOp) is backing the the new template introduced by the National Pension Commission (PenCom) given to the pension funds operators for calculation of retirement benefits to Contributory Pension Scheme saying it would promote the standard of living of retirees.

“By and large, the new template has been put in place to bring about an improvement in the standard of living of every retiree. However, some perceive this change as unfavourable if there is a drop in their lump sum. We are confident that over time, retirees will come to appreciate this”, said the PenOp President, Mrs Ronke Adedeji.

The use of new template, according Adedeji takes effect May 15, 2018 as an improvement on the existing template.

While explaining the characteristics of the new template, she stated, “Unlike the old template, the new programmed withdrawal template has factored in payment of arrears of pensions to retirees who did not access their benefits immediately after retirement. These retirees are paid pension arrears for the period between their retirement dates and the date they access their funds.

“Minimum lump sum payment has been reviewed from the initial 25 per cent to 20 per cent of the RSA balance, while the existing maximum of 50 per cent lump sum was repealed. The purpose of the reduction to 20 per cent is to enable retirees with smaller funds to access more periodic pensions for long term sustenance rather than collecting a huge lump sum today at the expense of their future; while those with large sums can potentially access more than 50 per cent.”

The PenOp boss added, “The new template contains salary structures of all Federal Government employees to further standardise benefits computation. The minimum of 50 per cent of the final annual total emolument has also been recaptured in the new programmed withdrawal template as 50 per cent of the total annual gross salary of retirees. This is to ensure that retirees have robust periodic pensions to cater for their needs at retirement.

“The new template programmes retirees from a minimum age limit of 50 years and above, while the maximum age limit of 65 years that existed in the initial template has been removed. This allows older retirees to earn more lump sum/pension at retirement.

“By and large, the new template has been put in place to bring about an improvement in the standard of living of every retiree. However, some perceive this change as unfavourable if there is a drop in their lump sum. We are confident that over time, retirees will come to appreciate this.”