The pension industry grew significantly between 2018 and 2019 in accumulation and investment of pension fund assets. However it has not met the aspirations of contributors and retirees under the Contributory Pension Scheme (CPS), especially Federal Government retirees who no longer receive their pension as and when due. Omobola Tolu-Kusimo reports.

The Nigerian pension industry began the year with no substantive head at the helms of affairs of the regulatory authority, the National Pension Commission (PenCom) since 2017.

In spite of this, the Acting Director-General, Mrs. Aisha Dahir-Umar, in her capacity drove regulations and pushed policies of the Commission beyond low budget and ensured regulation and supervision of the Pension Reform Act (PRA) 2004, as repealed by PRA 2014 did not suffer.

The Commission continued to take a stand against contraventions like poor corporate governance, delay in the payment of retirement benefits among others. Stiffer penalties were enforced among the operators against contraventions of the Act.

Mrs. Dahir-Umar completed work on micro pension plan which was started by the Commission’s former Director-General, Mrs. Chinelo Anohu-Amazu in 2015.

Micro pension plan refers to an arrangement under the Contributory Pension Scheme (CPS) that allows the self-employed and persons working in organisations with less than three employees to make financial contributions towards the provision of pension at their retirement or incapacitation.

The Acting DG ensured the launch of the much awaited scheme in March 2019 with President Muhammadu Buhari cutting the tape and declaring it open to capture and cover the over 70 million participants in the informal sector. Since then, about 30,000 persons working in the sector have been captured under the scheme.

Work is also in progress by the Commission to actualise the mandate of Transfer Window that will enable contributors and retirees under the scheme to move their pension account from one Pension Fund Administrator (PFA) to another, in the event the account holders are dissatisfied with services rendered by a PFA. The Commission has given up to June 2020 to open the transfer window.

The pension fund assets under the Contributory Pension Scheme (CPS) has however continued to grow. The fund has grown from a deficit of N2 trillion before the commencement of the Pension Reform Act in 2004 to N9.8 trillion in October 2019. The assets has grown by over 100 per cent in one year going by the N8.4 trillion recorded in October 2018.

But a major setback for the Commission is the nonpayment of pension to retirees of the Federal Government as and when due that has been the practice since 2015.

Presently, retirees who retired from December last year till date have not been paid their pension. This is as a result  of nonpayment of accrued rights into Retirement Savings Accounts (RSA) account of employees by the Federal Government.

In the same vein, some private sector employers fail to remit their employees’ contributions to their RSA account as stipulated by the PRA 2014.

Another setback for the Commission is the non-compliance and adequate enforcement on the mandatory 18 per cent monthly pension contribution rate for workers.

Both the government and private sector employers are in breach of the law as they still remit based on the old rate of 15 per cent. Besides, many do not remit the 15 per cent to their workers RSA account.

This has led to agitations by workers, retirees and stakeholders asking that the President, Muhammadu Buhari should priotise pension.

Stakeholders have called on the President to pay more attention to the pension industry and alleviate the suffering of retirees.

They claim that the country is gradually regressing to the old pension system as pensions are no longer paid as and when due.

Besides, they have asked the President to as a matter of urgency appoint a Board and substantive DG for PenCom.

Lending their voice to the call that the President do what is right for retirees and others under the Scheme are legislators in the country.

Revealing that Federal Government’s total pension liabilities to Federal Government retirees under the CPS is N400 billion, Former Governor of Kano State and Chairman, Senate Committee on Establishment and Public Service, Senator Ibrahim Shekarau condemned the accumulation of debts from accrued rights by the Federal Government against its workers.

He stated that the two chambers of the National Assembly will invite the Minister of Finance, the Accountant General of the Federation and the Secretary to the Government who is in charge of retirees under the scheme to explain to them why retirees are not paid.

He promised to escalate the issues surrounding accrued pension rights and other issue causing delayed pension to President Buhari and ensure an end is put to debts owed retirees.

The former Director-General of PenCom and Chairman, Polaris Bank, Mr Mohammed Ahmad also condemned the nonpayment of pension as and when due in recent times.

In his view, the President Buhari need to prioritise the payment of accrued rights of retirees.

He said: “Although the government had been religiously paying the monthly pension contributions based on the old rates, it has not been able to meet up with the adequate and regular payment of accrued rights.

“This is causing untold hardship and pain to many who have been waiting for years for their retirement savings account to be funded appropriately.

This is non negotiable and we should constantly bring this up at every opportunity until these accrued rights are funded by the government.

“While PenCom has been statutorily empowered by the PRA 2014 to direct the Accountant General of Federation to deduct at source unpaid accrued pension rights, this power had never been exercised because of political constraints.

The continued success of the pension industry will largely be hinged on the ability of employers to honour their obligations as and when due. In the recent past,  members of the National Assembly had assisted in getting the government to accelerate the payment of the arrears of accrued pension rights.

It would appear another tier of unpaid obligations have been built and the industry would once again require the collective efforts of all stakeholders for the timely payment of the accrued rights.”

Mrs Dahir-Umar on her part, stated that the CPS had, in the last 15 years, made appreciable progress in addressing most of the shortfalls of the erstwhile pension system.

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She disclosed that as at September 30, 2019, the pension industry membership had grown to 8.85 million participants, while the pension fund assets under management were valued at N9.58 trillion and deployed in critical sectors of the economy.

“The number of retirees under the CPS as at September 30, 2019 amounted to 298,614. Out of that number, 227,400 retirees are on programmed withdrawal and 71,214 opted for annuity. In the same vein, death benefits had been paid to 59,057 beneficiaries.

These statistics are clear evidence that the CPS has greatly improved access to retirement benefits for employees in both the public (Federal and State Governments) and private sectors.

“The CPS is, however, not without its challenges, the primary ones being inadequate funding of the Retirement Bond Redemption Fund (for payment of accrued rights of retiring Federal Government employees) and agitations by some agencies of government to pull out of the CPS.

Other challenges are operational, arising from implementation hiccups. It is in this regard that this Retreat is very important for the pension industry.

“The National Assembly, especially the Committee on Establishment and Public Service of the Senate and House of Representatives Committee on Pensions, are key stakeholders in shaping the direction of the pension industry and keeping the momentum of the reform in the sector; while making sure that the interests of Nigerians participating in the scheme are protected”, she added.