Yesterday, the Federal Executive Council (FEC) approved the issuance of a N758 billion bond to clear pension arrears for retirees.
The approval was granted during the Federal Executive Council (FEC) meeting at the State House, Abuja.
The Debt Management Office (DMO) was mandated to raise the funds for the payment of the arrears under the Defined Benefit Scheme, which preceded the Contributory Pension Scheme introduced in 2004 and reviewed in 2014.
Also, a 30 million Euro loan was approved for students’ housing scheme.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, told reporters after the meeting chaired by President Bola Ahmed Tinubu, that the move would address the financial burden of retirees who are waiting for their entitlements.
He said: “There was an approval for the government through the debt management office to raise a Federal Government bond of about 758 billion naira.
“That is to clear up the backlog of pension liabilities owed to various categories of pensioners under the Defined Benefit System that preceded the defined Contributory Pension Scheme that came into force in 2004 and of course, was updated with a new act in 2014.
“There were some accrued liabilities which were building up over time. For example, someone who was on a defined benefit scheme yet to retire, would need a top up of their contributions or the amount due to them every time that there was a wage increase, every five years or so.
“So, this liability that built up to a point where it was not going to be easy to pay them down on an ongoing basis, and so, to clean up that important area and to give people their right, which is payment of the pension liabilities as and when due, the government has put in place an approval for debt management office to raise 758 billion naira that will pay down all these liabilities and of course, be a tremendous relief to the beneficiaries.”
FEC also approved a €30 million concessional loan from the French Development Agency (AFD) to support student accommodation projects.
