The Director, Centre for Pension Right Advocacy, Ivor Takor, has faulted the salary-for-life approved for the Head of the Civil Service of the Federation (HOS)  and Permanent Secretaries (Perm Secs).

Takor said the HOS and Perm Secs were exempted from the CPS based on the advice of the Attorney-General of the Federation (AGF) that these senior civil servants are not covered by the PRA 2014 as they are not ‘employees’, but ‘appointees’ of the President based on the Section 171 of the 1999 Constitution.

He pointed out that based on a legal opinion, President Muhammadu Buhari approved the exemption of the HOS and Perm Secs from the CPS, placing them under ‘salary for life’ on the Integrated Payroll and Personnel Information System (IPPIS) where active workers are paid salaries.

He stated that by exempting them from PRA 2014, leaving them with no law governing their pensions,  is contrary to Section 173 of the 1999 Constitution.

He said: “Thus, regulating their pensions by administrative instrument as it has been done is unconstitutional. Indeed, the Supreme Court had decided in the case of SARAKI V. FGN (2016) LPELR-SC.852/2015 that no circular or other administrative instrument can supersede the constitution or statutes enacted by the National Assembly.

“Placing these categories of civil servants on the IPPIS Platform shows that they have no pensions, but “salary for life”. IPPIS policy is a policy implemented to ensure prompt and accurate payment of salaries of active public servants. It was not conceived as a platform for the payment of (salaries for life) pension. Section 173(1) of the 1999 Constitution provides for pension and not salary after retirement.

“The Head of the Civil Service of the Federation and Federal Permanent Secretaries by seeking and getting exemption from the CPS have exhibited moral bankruptcy. They are responsible for the implementation of Federal Government policies. They all keyed into the CPS with their other colleagues in the civil service but unfortunately, when they found themselves in privileged positions in the service they manipulated the system and got exemption.”

Retirement Savings Account (RSA) holders have continued to take advantage of the Transfer System that enables them change their Pension Fund Administrators (PFAs) at will.

The RSAs, which comprises contributors and retirees, have moved over N277.19 billion from one PFA to another since the opportunity was granted by the National Pension Commission (PenCom) in 2020.

Read Also: PenCom okays Access Bank’s pension business acquisition by FBN Holdings

Findings show that most RSA holders are moving their funds based on service delivery and this has been driving competition among the PFAs.

According to PenCom, in the fourth quarter of 2020, 2,799 RSA holders transferred N18.89 billion, noting that by first quarter 2021, 12,681 RSA holders moved N47.78 billion.

Continuing, the pension sector regulator said 10,166 RSA holders, moved N35.89 billion in second quarter 2021; 12,872 RSA holders, transferred N45.56 billion in third quarter 2021 and 12,874 RSA holders, moved N42.49 billion in fourth quarter 2021.

PenCom submitted that in first quarter of the year, 12,336 RSA holders moved N36.36 billion and in second quarter, 14,821 RSA holders transferred N50.22 billion.

The National Pension Commission (PenCom) has restated its commitment to excellent service delivery.

It, however, said the increase in the Minimum Regulatory Capital (Shareholders’ Fund) requirements of Pension Fund Administrators (PFAs), from N1 billion to N5 billion, informed their decision to serve the public better.

The Director-General, Mrs. Aisha Dahir-Umar, told The Nation that the prioritisation of contributors’  welfare was to enable the Retirement Savings Account (RSA) holders get the best service.

For instance, she said, PFAs are mandated by PenCom to issue RSA statements to contributors and retirees at least once every quarter.

On the other hand, she said, RSA holders are expected to update their details with their PFAs to ensure that they receive their statements regularly.

She said the RSA statement has some minimum information and disclosure requirements mandated by the commission, which included the amount contributed from inception; monthly employer and employee pension contributions; income earned (returns on investment); and the balance.

PFAs may also send their RSA balances via text messages to  the account holders who have the option of checking the performance of his/her RSA online or by visiting the nearest branch of his/her PFA to obtain a hard copy of the RSA statement.

Read Also: ‘PENCOM DG does not ‘shy away from her responsibilities’

Where there is a difference between the amount credited into the RSA of an employee, she said, the employee should approach his PFA and employer for reconciliation.

Mrs. Dahir-Umar pointed out that where there is an under payment of the monthly contributions, the employer must remit the difference into the RSA of the employee.

She also noted that the contribution rates are a minimum of 10 per cent by employer and eight per cent by employee.

She said: “Employers are mandated to remit the monthly pension contributions of every worker on their payroll.  For employees whose salaries are not classified into basic, transport and housing allowances, the pension contributions should be based on the gross salary payable. Employers should take note of this and be guided accordingly. Employees should monitor and report erring employers to the Commission for action.

“Regarding the non-remittance for employees of treasury-funded Ministries, Departments and Agencies (MDAs), their remittances are done by the Commission or the Integrated Personnel and Payroll Information Systems (IPPIS) Division under the Office of the Accountant-General of the Federation. Such employees should write a complaint to their PFA, inform the Pension Desk Officer of their MDAs and provide the  documents. Upon receipt and verification of the documents, remittance of the accumulated contributions would be made into RSAs. Where the employee is working for an FGN MDA that is already on the IPPIS Platform, such complaint should be forwarded to the Office of the Accountant-General of the Federation for verification and remittance of outstanding contributions.

“Finally, PFAs have a primary responsibility of providing efficient customer service to their clients. The RSA holders are, therefore, expected to seek a resolution of issues with their PFAs before escalating to PenCom. Some of these issues include non-remittance of pension contributions, payment of retirement benefits and administration, among others. With the conclusion of recent recapitalisation, stakeholders, particularly RSA holders, should expect increased effectiveness and efficiency as well as improvement in service delivery from PFAs.”

According to her, Section 55 of the PRA 2014 empowers PFAs to open Retirement Savings Account for all employees with Personal Identity Number (PIN) attached; invest and manage pension funds and assets and provide regular information on investment strategies, market returns and other performance indicators to the PenCom and employees or beneficiaries of the RSAs.

“The Act also mandates PFAs to maintain books of account on transactions relating to pension funds managed by them and provide customer service support to employees, including access to employees account balances and statements on demand.

“In addition, PFAs pay retirement benefits to holders of Retirement Savings Accounts (RSAs), bear responsibility for all calculations in relation to retirement benefits and carry out other functions as may be directed by PenCom from time to time.’’

Prior to the Pension Reform of 2004, which established the Contributory Pension Scheme (CPS), Pension Administration in Nigeria faced numerous challenges, which led to lack of transparency and accountability, amid weak administrative structures.

However, 18 years since the introduction of the CPS, the system has stayed the course, when viewed within the context of the pitfalls that characterised the pension schemes prior to it.

With apprehension about safety of pension funds at the inception of the CPS, pundits are surprised at the relative stability attained, as pension funds under the CPS continue to grow. Here are the key safeguards of the CPS that have ensured transparency and the safety of pension funds.

Strict licensing requirements

The Pension Reform Act 2014 prescribes a strict licensing regime to operate as a Pension Fund Administrator (PFA) or Pension Fund Custodian (PFC).This includes possessing the professional capacity to manage pension funds and an undertaking not to engage in any other business except that of management of pension funds. In addition, such applicants must satisfy the condition that they have never mismanaged any fund prior to the application.

Strict regulation of investment of pension funds

The investment of pension funds by PFAs is regulated in accordance with the Investment Regulation issued by The National Pension Commission (PenCom). The regulation prescribes allowable investment outlets and sets limits in percentage of funds that can be invested. This ensures that risks are properly managed to ensure safety of the funds.The PFA’s exclusive responsibility for investment decisions is only limited by compliance to the provisions of the regulation.

Daily monitoring of pension fund investments

PenCom requires PFAs to submit daily valuation reports on pension fund investments at the end of each trading day.The implication is that PenCom is able to ensure that investments are in accordance with the Investment Regulations and could identify any infractions immediately for corrective action. In effect, the safety of the pension funds is monitored by PenCom at all times.

Ring fencing of pension assets through the separation of custody and management of pension funds

The PFA manages the pension funds without having direct access to the funds, as custody is vested in a separate entity, the PFC. In effect, while the PFA makes day to day investment decisions in line with the investment regulations issued by PenCom, it is the responsibility of the PFC to effect payments for the investment and receive any dividends or profits therefrom, on behalf of the PFA. PenCom ensures that both parties adhere strictly to regulations governing the pension funds. Indeed, the cardinal principle of separation of custody from management and supervision has resulted in a pension scheme with a sound internal mechanism for transparency and accountability.The ring fencing of pension fund assets has resulted in the consistent growth in pension assets.

Segregation of pension funds from the assets of pension operators

There is separation between the pension funds and the assets of pension operators.This means that an operator is not allowed to combine its company funds with the pension funds, which are held in exclusive accounts, kept in safe custody by the PFC.Therefore, a pension operator’s insolvency will not negatively impact on the pension funds. Indeed, where an operator is incapacitated by capital inadequacy, for instance, the pension funds will simply be transferred to another solvent operator, under the direction of PenCom.This segregation of pension funds has further assured the transparency of the CPS.

Prohibition of applying pension funds as loans or as collateral for loans

Pension funds are secured for the sole purpose of providing retirement and terminal benefits for the RSA holders. Consequently, pension funds are prohibited from being given out as loans or applied as collateral for loans. This has prevented the depletion of pension funds through non-performing loans taken by the RSA holder or the PFA granting a loan to a third party.

Effectiveness of the CPS

Safeguards

While the foregoing safeguards are not exhaustive, their effectiveness is best represented by the consistent accumulation of pension fund assets, which stood at N14.27 trillion as of June 30, 2022. Furthermore, 9,795,957 million RSA holders have been registered under the CPS since inception.

Nigeria’s Pension fund assets rose to N14.36 trillion in July, this year, from N14.267 trillion the previous month.

This represent N100 billion or 0.7 percentage growth in one month.

This was made by in the National Pension Commission (PenCom) Pension Funds Industry Portfolio for the Period Ended July 31, 2022.

The report showed that a total number of Retirement Savings Account (RSA) holders stood at 9,730, 778 while contributors under micro pension stood at 81,674 in the period under review.

The report showed that the pension managers, Pension Fund Administrators (PFA) invested a major chunk of N9.04 trillion out of the total fund in Federal Government Securities, of which N8.70 trillion went to Federal Government Bonds; N180.61 billion invested in Treasury Bills; N12.06 billion in Agency Bonds (NMRC); N96.24 billion in Sukuk and N32.86 billion in Green Bonds.

Furthermore, the PFAs invested N168.46 billion in state government securities; N915.48billion in Domestic Ordinary Shares; N105.34 billion in Foreign Ordinary Shares.

EBITARI: Hello, my name is Ebitari. My Pension Fund Administrator (PFA), Premium Pension, has refused to pay  my contribution.

I worked with NIPOST in Bayelsa for 16 years before I transfered my service to the Bayelsa State Civil Service where I retired in 2020.

Since then, I have been on the neck of Premium Pension to pay me the balance in my Retirement Savings Account (RSA). But up till now, they have not paid me.

PENCOM: Please provide us with the name of your Pension Fund Administrator (PFA) to enable the commission investigate further. Thank you.

EUGENIA: My name is Eugenia. I submitted application for the payment of my lump sum since July 28, but nothing has been done about it.  Please me on this matter.

PENCOM: Please provide us with the name of your Pension Fund Administrator (PFA) to enable the commission investigate further. Thank you.

DEBORAH: Good day, my name is Deborah, the next-of-kin to the late Ogunmokun, who retired from a primary school in Iwo, Osun State in 2016.

We obtained his bond from the state government January 2022, having submitted the Letter of Administration, death certificate and other  documents to First Guarantee Pension Limited, his PFA.

Since January, we are yet to get my husband’s entitlement while other relatives  have been settled.

Please, help me out of this problem.

Omobola, I checked last Wednesday’s edition of The Nation, but my case was not published as promised. Please help.

PENCOM: Please provide his Retirement Savings Account (RSA) PIN details to enable the commission investigate further.Thank you.

URADE: My name is Urade. I retired from PPEB in Asaba, Delta State. I left my PFA, Trust Fund for Annuity with Standard Alliance Insurance Plc since July 2017. They paid me till June 2022, and stopped. I wrote to the National Insurance Commission (NAICOM), but there was no reply. Kindly help me. Thanks.

PENCOM: Please liaise with the National Insurance Commission (NAICOM) as your complaint does not fall within the purview of National Pension Commission (PenCom). Thank you.

EMMANUEL: Good day, my name is Emmanuel. Can you help us intervene in retirees’ affairs with Premium Pension? Their desk officers seem not to be updated with the new regulations on retirement benefits. I was told the regulations haven’t been sent to them from PenCom. They claim that they are yet to be given the go-ahead to verify 2022 retirees. They are not advising the retirees on the current documents to present as specified in the new regulation. Does it mean 2022 retirees can’t verify?

Also, I will like to know if programme withdrawal enjoys life pension payment or if annuity gives life pension payment.

PENCOM: Online verification and enrolment for 2022 has  commenced. Refer to www.pencom.gov.ng for more information.

Programmed Withdrawal- yes calculated over an expected life span and minimium pension guarantee for when RSA is deplected. Life Annuity for life but guaranteed for only 10 years after which in the event of death the legal named beneficiary has no entitlement

OJEBOLA: I retired in November 13, 2013 and my documents were duly submitted to LASPEC on September 23, 2021. My PFA is Stanbic IBTC Pension. I am tired of repeated calls and this hotline never goes through for the public to use.

My pension benefits are long overdue since November 13, 2013. My repeated calls at LASPEC, Alausa are not yielding any result. Kindly find out the cause of the delay. I am elated at your prompt response.

PENCOM:  Provide details – Full name, PFA, PIN.

ADEKUNLE: Good day, I was given your number to seek for your assistance on my late dad benefits been processed by Leadway Pensure. He worked at the Federal Polytechnic, Offa and died in service. I submitted the documents since 2018, but up till date, I have not been able to get his entitlement. This is why I need your assistance.

PENCOM: Payment was made in August 2021.

ANNONYMOUS: Good Morning. I worked at the NPF and was enlisted in 2016. Ever since, I haven’t received my pension. I have made several complaints, but to no avail.

Recall that I transferred to NPF Pension Limited from Trustfund Pensions Limited and my balance in the later has been transferred to the former. My employer has also not remitted my pension contributions to my PFA. Kindly assist me.

PENCOM: It’s being processed for payment.

Pension Fund Administrators (PFAs) are not allowed to invest pension funds or assets in shares or securities issued by it, its Pension Fund Custodian (PFC), a shareholder of the PFA or its PFC.

PFAs are also not allowed to sell pension fund assets to themselves, shareholder, director, affiliate or associate, employees, spouse of PFA employees, affiliates of any shareholder of the PFA.

The National Pension Commission (PenCom) could impose restrictions on investments by PFAs to protect the Retirement Savings Accounts (RSAs). Any PFA that fails to comply with the PRA 2014 will be penalised by the Commission, the Director-General, Mrs. Aisha Dahir-Umar, has said.

She told The Nation that the commission would not compromise on the major objectives of pension fund investments, which include safety of the assets and maintenance of fair returns on investments.

She explained that pension funds are invested in varied but quality financial instruments, all tailored toward ensuring the safety of pension assets and fair returns as enshrined in Section 85 (1)of the Pension Reform Act 2014 (PRA 2014), Mrs. Dahir-Umar stated that the funds have witnessed continuous growth since the Contributory Pension Scheme (CPS) was introduced in 2004.

She noted that this is evident in the accumulated value of the pension assets which has risen to N14.27 trillion as of June 30, 2022. She further stated that Section 85 (2) of the PRA 2014 states: “Pension Fund Assets shall only be invested in accordance with the regulations and guidelines issued by the Commission.”

Accordingly, she said, the Commission issued the Regulation on Investment of Pension Fund Assets (Investment Guidelines) to guide Licensed Pension Fund Operators in investing pension funds and assets.

She said: ‘Based on Investment Guidelines, pension funds and assets shall be invested in bonds, treasury bills and other securities issued by the Federal Government, state and local governments that qualify.

“Furthermore, pension funds can also be invested in debentures, redeemable shares and other debt instruments issued by corporate entities and listed on a Stock Exchange under the Investment and Securities Act and ordinary shares of public limited companies listed on a Stock Exchange under the Investment and Securities Act.

“Finally, pension funds can be invested in bank deposits and securities, real estate development investments, specialist investment funds and other financial instruments as approved by the Commission from time to time.”

She added that statistics showed that as at the end of the second quarter of 2022 (Q2) to end of last June, N8.31 trillion was invested in Federal government bonds, N475.64 billion in Federal Government treasury bills, N13.83 billion in agency bonds and N161 trillion in State Government securities.

“Similarly, a total of N1.19 trillion was invested in corporate debt securities, N2.14 trillion in money market instruments and N56.13 million in mutual funds during the same period,” she added.

A 12-year-old pupil of Gateway Schools in Enugu, Ugbomyke Princewill Ebubechukwu, has emerged the winner of the first edition of Heirs Life Essay Championship.

The nationwide competition was organised by Heirs Life Assurance (HLA), one of the leading digital life insurance company in Nigeria, with over one thousand pupils submitting entries from across the country.

As the overall winner, Princewill was with presented a brand-new laptop, the prize for the first place, and his school, Gateway Schools, represented by the proprietress Dr. Loveline Ndu received the Heirs Life Essay Championship cup and N500,000 worth of books and other educational materials at the award ceremony held in Enugu, Enugu State on, Friday, August 19, 2022.

Participating students were tasked to submit a 500-word essay on the topic, ‘If I were the President of Nigeria.’ The over 1000 entries received were graded by a team of experts under the leadership of a notable Professor of English Language, followed by a selection interview for further quality assurance.

Other winners include Purity Chukwudi Chetachi, a Basic 5 pupil of Star of Hope School, Lagos, who emerged first runner up and won a cash prize of One Hundred Thousand Naira (N100,000), and Abidoye Habeeb, a JSS 2 student of Mivara Secondary School, Lagos, who won third place with a cash prize of Fifty Thousand Naira (N50,000).

The Managing Director, Heirs Life Assurance Limited, Niyi Onifade said the Essay Championship showcase the highly intellectual young future leaders in our nation.

He said: “All the students who participated in this competition are winners. However, we can only award a few of them. Indeed, the quality of essays that we received from these amazing students was fascinating and the winner, Princewill Ugbomyke, expressed himself in such a remarkable way that one could easily visualise his dreams for our country. We congratulate Princewill, his school, and the other finalists, and wish all of them a very bright future.”

Speaking on behalf of the star prize winner, Ugbomyke Princewill Ebubechukwu, his parents, Mr. and Mrs. Ebubechukwu, appreciated Heirs Life for their initiative and the opportunity given to students to compete in an educative and cordial manner. They also wished the Management of Heirs Life greater successes in their future endeavours.

The Heirs Life Essay Championship is one of the company’s activities to launch its flagship product for schools – the Heirs Smart School Plan, an affordable low-cost plan that promises to pay a child’s school fees throughout his or her stay in the school if the parent is unable to do so in a case of death or permanent disability. The Smart School Plan served as an inspiration for the essay competition.

Heirs Life Assurance (HLA) is a specialist life insurance company offering simple, quick, accessible, and reliable life insurance, retirement, and children’s education protection plans. HLA offers a wide range of personalised life insurance protection and investment plans that provide financial security to individuals and businesses. Heirs Life is also a subsidiary of Heirs Holdings, a pan-African investment group with presence across four continents and 20 African countries.

DEBORAH: Good day, my name is Deborah, a next-of-kin to the late Ogunmokun who retired from a primary school in Iwo, Osun State in 2016.

We obtained his bond from the state government in January, this year, having submitted a Letter of Administration, death certificate and other documents to First Guarantee Pension Limited, his PFA.

Since January, we are yet to get my husband’s entitlement while other relatives have been settled. Please help me out.

Please note that I checked last Wednesday ‘s edition of The  Nation, but my case was not published as promised. Help me out.

PENCOM: Submission is yet to be made to PenCom, still undergoing verification in line with the processes for death benefits at the PFA.

IGBINOVIA: I am a staff member of one of the Federal tertiary institutions. My RSA contributions for January to August 2020 have not been credited to my account. I am told that the fund is yet to come from PenCom. My PFA is Stanbic-IBTC Pension. Kindly help.

PENCOM: Mr. Igbinovia should please send PFA and RSA details.

IGBINOVIA: My PFA is Stanbic-IBTC. I have sent other details required by PenCom.

AJALA: Greetings to the staff members of National Pension Commission and The Nation. My complaint is that one Oti, a staff member of Skye Bank retired December 2009 and was paid 2.5 percent published on June 1 of the newspaper.

While I, an officer of NCS, who also retired June 2009, was informed that I was not eligible. My PFA is Sigma Pensions. Please me get my 2.5 percent payment. Thanks.

PENCOM: Please note that 2.5 percent applies to RSAs from July 2014, when the new rate of 18 per cent was introduced. You do not qualify.

EBITARI: Hello, my name is Ebitari and my PFA is Premium Pension. They refused to pay me my contribution. I work with NIPOST Bayelsa for 16 years and transfer my service to Bayelsa State Government where I retire in year 2020. Since then, I have been on the head of Premium Pension to pay the balance in my Retirement Savings Account (RSA), but up till now, they have not paid me.

ANNONYMOUS: Good day, please could you help us intervene in retirees’affairs with Premium Pension. Their desk officers seem not to be updated with the new regulations on retirement benefits.

I was told the regulations haven’t been sent to them from PenCom. I was also told they were yet to be given the go-ahead to verify 2022 retirees.

They are not advising the retirees on current documents to present as specified in the new regulation. Does it mean 2022 retirees can’t verify?

ANNONYMOUS: Good day sir/ma. When will 2022 retirees start receiving their entitlements. Nobody is talking to us. The suffering is getting too much.

ODUNAYO: Dear Omobola, I lodged a complaint against the issue of non-payment of my late brother, Police Corporal Odunayo, and you asked me to purchase the last Wednesday edition of The Nation, which I did, but nothing has been mentioned about my case.

I even bought a copy, yet nothing was said about it.

Kindly help us as he left little children behind. It is almost five years that his pension has not been paid. His PFA is Premium Pension.

He died in 2015 and documents and verification were done at the Police headquarters at Eleweran. A bank statement has been submitted. Yet, we have not got any message from the PFA. Kindly assist us.

EUGENIA: My name is Eugenia. I submitted an application for the payment of my lump sum since July 28.  Please assist on this matter.

ANATE: Good day, my name is Anate. I requested for 25 per cent of my pension benefit from IEI Anchor. I have submitted the required document and information to them and my former organisation since May, this year.

The reason for the delay, according to them, is that they needed approval from PenCom to deduct the excess payment from my account before I could be paid.

Please, I need your support to facilitate the process because is taking too long time.

LADIPO: Dear Omobola, thank you for not allowing the voiceless  pensioners to die in penury while those who trampled upon their rights are enjoying their benefits. With the deplorable state of the naira, kindly remind PenCom of the pension enhancement when it is due. God bless you.

THE NATION: The newspaper will intervene. Therefore Ebitari, Odunayo, Eugenia, Aante and Ladipo should look out for the newspaper next week for responses from PENCOM.