Pension Review Magazine

Pension Review Magazine

Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

 

The pension industry has undergone rapid transformation in slightly over a decade largely due to reforms that saw Nigeria offsetting billions of unpaid pension liabilities and accumulating N7.52 trillion under the contributory pension scheme (CPS) as at the end of December, 2017.

The National Pension Commission (PenCom), currently headed in acting capacity by Aisha Dahir-Umar, had over the years regulated the contributory pension scheme, growing membership to slightly less than eight million members.

Despite these achievements in the nation’s pension industry, there are key policy issues affecting pension and retirement in the country that are still in limbo.

One of such policy issues is the transfer window yet to be authorised by PenCom in the contributory pension scheme in the country.

The Pension Reform Act, 2014 provides that an employee may, not more than once in a year, transfer the Retirement Savings Account (RSA) from one Pension Fund Administrator (PFA) to another without producing any reason for such transfer. 

Section 13 of the Pension Reform Act 2014 also provides that, “subject to guidelines issued by the commission, a holder of a retirement savings account maintained under this Act may not, more than once in a year, transfer his account from one Pension Fund Administrator to another.”

Despite this provision, PenCom is yet to authorise PFAs to allow RSA holders to transfer their RSAs from one PFA to another.

The implication is that RSA holders whose PFAs are underperforming in terms of investment of their savings are stucked with such PFAs as they cannot move their funds to PFAs with better history of high returns on investment. 

When contacted, a source within PenCom explained that the Commission is being meticulous on the transfer window to ensure that contributors are not affected.

The source said the Commission is cleaning up the database of RSA holders to ensure that issues such as duplications and misinformation are fixed to pave the way for RSA transfers.

Secondly, minimum pension guarantee is also in limbo as PenCom is yet to clearly define what retirees can earn as minimum pension just as there is minimum wage in the country.

Section 71 of the Pension Reform Act 2004 (now amended 2014) provided for the establishment of a minimum pension guarantee for all workers who have contributed for some years but have not accumulated enough to have a minimum pension at retirement.

Section 71 of the Pension Reform Act 2004 (now amended 2014) provided for the establishment of a minimum pension guarantee for all workers who have contributed for some years but have not accumulated enough to have a minimum pension at retirement.

For the smooth operation of the minimum pension guarantee, Section 82 subsection 1 of the Pension Reform Act 2014 provided for the establishment of pension protection fund to provide minimum pension guarantee for contributors who have insufficient funds in their retirement savings account as at retirement.

The Act requires the federal government to fund the pension protection fund from an annual subvention of one per cent of the total monthly wage bill payable to employees in the public service of the federation and returns from pension fund investments.

The Fund is also expected to be funded from the annual pension protection levy paid by the National Pension Commission (PenCom) and all licensed pension operators at a rate to be determined by the commission from time to time.

However, findings show that there is no defined minimum pension guaranteed at the moment under the CPS.

On minimum pension guarantee, the source said PenCom has been working on it.

Thirdly, accrued right, which is duly backed by law, is another issue affecting the contributory pension scheme negatively.

The pension Act requires that government should pay the accrued rights of workers who transited to the contributory pension scheme in addition to the savings in their RSAs.

To ensure that government pays the accrued rights, PenCom came up with a policy that workers entitled to accrued rights cannot access their RSAs until government pays their accrued rights into such RSAs and this policy has left many retirees without benefits months after retirement.

The last time the government paid accrued rights was in December, 2016, a development that has left retirees who left active service in 2017 unable to access their benefits.

There have been calls for PenCom to review its policy and allow retirees access to their RSAs as they await their usually delayed accrued rights.

The source said the problem is not with PenCom but on the government and that PenCom has been consistently nudging the government to release funds to settle the backlog.

The source revealed that PenCom’s effort led to the recent release of the accrued right of those who retired in January and February 2017.

The source further said it was not possible to allow retirees access RSAs as the accrued right is usually higher than the contributions accumulated in the RSAs.

Micro-pension scheme and access to contributory healthcare are also two issues that are in limbo in the nation’s pension industry. 

For a while now, PenCom has been on the verge of rolling out Micro Pension Plan (MPP) to guarantee financial security for informal sector players as well as boost Nigeria’s pension assets to over N20 trillion by 2020. 

The pension Act expanded coverage of the CPS to the self-employed and persons working in organisations with less than three employees.

However, the rollout remains in limbo just as retirees are taken off the National Healthcare Insurance Scheme (NHIS) at the point of retirement when they need healthcare the most in their lives.

The source in PenCom explained that the Commission is still trying to come up with a guideline to regulate micro pension as it affects people in the informal sector.

The source said the informal sector is largely unstructured and unregulated unlike the formal sector of the economy and it is on the basis of this that PenCom is being careful in putting together the guidelines.

 

 

 

 

 

 

The Kwara State House of Assembly, yesterday, passed into law a bill to suspend payment of pension to former governors and deputy governors during any period they hold political or public office.

The passage of the bill was sequel to a report earlier presented by the Chairman, House Committee on Establishment and Public Service, Emmanuel Folorunsho Abodunrin

The Deputy Speaker, Elder Matthew Okedare, who presided over yesterday’s sitting, praised members for ensuring prompt passage of the bill which was sponsored by the Member representing Omupo Constituency, Mashood Bakare, and directed the Clerk of the House, Alhaji Ahmed Katsina Mohammed, to prepare a clean copy for the governor’s assent.

Under the amended law, former governors and deputy governors will cease to enjoy pension whenever they hold a political or public office.

However, the law will not be applicable where the person does not receive any remuneration on account of holding such office.

 

 

 

A Pension Fund Administration (PFA) company, Leadway Pensure, has renovated classrooms in two primary schools in Kaduna State.

At the commissioning ceremony of the projects, the Executive Director of Leadway, Olusakin Labeodan, said a block of four classrooms at LEA Primary School, Katsina Road in Kaduna North Local Government Area (LGA) and a block of three classrooms and an office at LEA Primary School Nasarawa II, Trikania in Chikun Local Government Area were repaired both as corporate social responsibilities.

 

Delays in payment of pension have exposed some retirees to pension fraudsters who call the unsuspecting senior citizens and demand payments to facilitate payment.

Pension Review Magazine found that the fraudsters have devised some antics to swindle pensioners and retirees, including posing as pension operators and regulators agents as wells investment experts

A retiree, told the Pension Review Magazine during a recent verification exercise in Abuja that while he was waiting for his pension, he got calls from anonymous persons who tried to swindle him.

He said one of them told him he could help him “fast-track” the payment of his pension if he could pay N100, 000.

“I asked him where will I get N100, 000. I have been without pension for three years. I depend on my children for survival,” he said.

The retiree said he suspected that it was a fraudster when the caller called back and reduce the N100, 000 to any amount he could afford.

“I told him to come and meet me face to face for the money but he asked me to pay the money into one account. I blocked him,” he said.

Another retiree, Franka Ufom, who retired in 2017, said she also got a call from unknown person asking her to pay so that he could facilitate her pension.

She said immediately she got the call, she knew it was from a fraudster because she and other retirees had been warned at the pre-retirement workshop she attended to watch out for such fraudsters.

Addressing some retirees recently in Abuja during a verification exercise, the Executive Director of the Pension Transitional Arrangement Directorate (PTAD), Barrister Sharon Ikeazor, told the retirees to watch out for fraudsters pretending to be staff of the Directorate.

Barrister Ikeazor told the retirees that PTAD does not charge retirees for its services and they should not pay money to anyone who calls them to help them facilitate their pension.

Similarly, recently, the Nigeria Police Force (NPF) cautioned its retiring officers to beware of scammers disguising as insurance company agents luring them to invest their pension.

Speaking at a pre-retirement workshop organized by NPF pension Headquarters, the Managing Director of the NPF Pensions Limited, Hamza Sule Wurobokki, told the officers that the fraudsters only want to rob them of their fruit of labour.

Wurobokki said the fraudsters are always on alert to invite the retirees to join illegitimate business once they discovered that they received the arrears.

The retreat, he said, was organized following the directive by the IGP to sensitize officers retiring between January and June on procedures involved in enabling them to receive their pension with seamless effort, while preparing them for life after retirement.

While assuring the pensioners that there will be no delay in payment of their entitlement to them, the managing director said the IGP is very much concerned about the welfare of NPF retirees.

He added, “Currently we have paid virtually all that retired in 2016, for 2017, we are currently paying for January and February, and as soon as the approved right comes from Federal Government, there will be no delay in payment to the retirees.

He disclosed that NPF has set aside N400 million to be disbursed to NPF pensioners. 

“A pensioner relies on his pension, but also one can be useful and productive to themselves by engaging in some kind of venture, whether it is farming, animal husbandry or fishing, but whatever the kind of venture one goes into will supplement the family and keep you busy,” he advised them.

 

Retired Police Officers of Nigeria (REPON) zone one chapter Kano revealed that, it has written to the presidency in respect to the bill presented to the house by Mr. Oluwale Oke of Obokun/Oriade federal constituency of Nigeria seeking for an amendment of pension reform act 2014 which contain the exclusion of Nigerian police, Nigerian customs service among other para-military from the contributory pension scheme.

This was disclosed by REPON’s zone one secretary ASP Sa’idu Garba Garaha at the end of its monthly meeting held in Kano. According to him the letter written to the presidency is seeking for Mr. President's support in the amendment of the pension act.

He added that several steps have been taken by the retirees to ensure that their demand has legally reached attainable stage to save its members from unwarranted hardship.

 “It is obvious that, successful passage of the bill which is before the house of assembly seeking for our exclusion is the only solution to the myriad problem being currently faced by  the retired police and para-military under the contributory implemented pension scheme throughout the federation, it is our right and we want our rights to be respected,” said the secretary.

 

Governor Rauf Aregbesola of Osun  state has approved the release of N1 billion for the payment of contributory pension to retired civil servants in the state.

Dr Festus Oyebade, the state Head of Service, made this known on Friday in Osogbo at a meeting of the Forum of Head of Service/Permanent Secretaries, Coordinating Directors, Director-General, General Managers and Executive Secretaries. Oyebade said additional N200 million was also released for the payment of gratuity to the pensioners.

The Head of Service stated that the governor was committed to the welfare of all retired and serving Public Servants, hence the approval of the funds.

He said the economic resources of the state needs to be improved upon for the government to be able to carry out its constitutional duties.

He said that all hands must be on deck to improve the state internally generated revenue for the benefit of all.

Oyebade commended the governor for the gesture and expressed optimism that more funds would be released to take care of the backlog of pension and gratuity of retired civil servants in the state. (NAN)

 

Page 1 of 34

Pension Review Magazine is the authoritative source of information on how these schemes and their sponsoring employers are working together to provide their members with an adequate retirement income.

Our case studies, news analysis and informed comment provide trustees, management teams and their providers with timely, practical information to inform their day-to-day jobs.

We use cookies to improve our website. Cookies used for the essential operation of this site have already been set. For more information visit our Cookie policy. I accept cookies from this site. Agree