Category: Pension

The National Pension Commission (PenCom) has unfolded a new retirement and terminal benefits for retirees, the outcome of its maiden review of the pension regulation since its inception in 2007, Omobola Tolu-Kusimo writes.

THE National Pension Commission (PenCom) has reviewed its retirement and terminal benefits.

It eliminates problems faced by retirees under the Contributory Pension Scheme (CPS) on pension enhancement, voluntary contributions, temporary access to Retirement Savings Account (RSA) due to loss of job, payment under the micro pension plan, administrative sanctions for violations by Pension Fund Administrators (PFAs), among others.

The regulation introduced some amendments and clarified others.

According to PenCom, the revised regulation entitled: “Revised regulation on retirement and terminal benefits Part I” is to be implemented by employers and pension managers.

The Director-General, PenCom, Mrs. Aisha Dahir-Umar, explained that the regulation guides the accessment of retirement and terminal benefits by contributors and retirees under the CPS.

She said  the commission obtained input from key stakeholders to ensure a more efficient retirement benefit administration.

On the documentation of benefits, she explained that while the old regulation outlined documents for accessing benefits, the revised regulation has simplified the process.

Mrs. Dahir-Umar said the commission had mandated Pension Fund Administrators (PFAs) to ensure that the documentation was done for the retirement of RSA holders four months to their retirement.

To ensure that prospective retirees are educated on the modes of accessing their benefits, she said the PFAs had also been mandated to advise prospective retirees to check their websites and be acquainted with the CPS Retirement Pack for the Programmed Withdrawal (PW) and Retiree Life Annuity (RLA) at least three months to retirement.

She added that the pack also contains other issues for guiding workers prior to their retirement.

Addressing the non-confirmation of employment status by some employers, she said the revised regulation has clarified the provisions on the notification and documentation required for accessing the RSA due to temporary loss of job. She defined temporary loss of job as a situation where an employee retires, resigns or is kicked out before attaining 50 years but is unable to secure another employment four months after.

She said: “The provision addresses situations where employers refuse to confirm the retirement or disengagement of their former employees. Prior to this revision, a letter of acceptance of resignation or disengagement issued by the employer is mandatory for a pension contributor seeking payment of 25 per cent for temporary loss of job.

“However, The Revised Regulation provides that where the employer fails/refuses to accept the resignation letter from the employee, the PFA shall write the employer confirming the employee’s resignation and ensure that an acknowledgement copy is kept as proof of receipt. Where the employer fails to respond to the PFA’s inquiry within 30 days, the employer’s refusal is taken as acceptance of the employee’s resignation for benefits payment.”

On the additional lump sum payment, the PenCom chief stated that the revised regulation is clear. The retirees should be allowed to access the fund after paying an initial amount provided that there are more inflows of cash into the RSA from the employers.

“However, the additional remittances shall first be applied to augment pension up to 50 per cent of the retiree’s final salary while the balance may be paid out as lump sum. Where the retiree’s pension is already up to 50 percent of final salary, the retiree may choose to collect the entire additional remittances as lump sum. Where the additional inflow into the RSA of a retiree on Retiree Life Annuity (RLA) is not up to N100,000, the amount shall be paid into the retiree’s bank account, subject to the Commission’s approval.”

Addressing RSA consolidation before payment of benefits, she noted that the regulation had clarified that the RSA be consolidated before retirement benefits could be accessed.

“A retiree shall only be entitled to access his or her retirement benefits upon consolidation of his or her RSA.The components of an RSA at retirement shall consist of accrued pension rights or pre-act benefits (if any) for employees that were in employment before the commencement of the CPS, employer/employee pension contributions, returns on investment and fixed portion of voluntary contributions (if any).

“The new regulation mandates the PFA to liaise with the employer and other relevant parties to ensure that the entitlements of a retiree or deceased person are credited to his/her RSA to determine their benefits.”

On accrued pension benefits for private sector contributors, the PenCom boss said the regulation has unfolded the administration of Pre-Act Benefits, which are the accrued pension benefits of contributors mainly in the private sector in line with the employer’s trust deed prior to the commencement of the CPS in June 2004.

Thus, any employee who retires and has pre-Act contributions should notify the PFA of his/her intention to withdraw the Pre-Act balance.

She added that a PFA should request the retiree to provide documents and an application to access the Pre-Act part of the RSA balance.

Consequently, the Pre-Act balance can be paid to the retiree separately, prior to selecting either Programmed Withdrawal or Annuity modes of accessing retirement benefits, she said.

 

The Lagos State Government  paid over N38 billion as pension to 9,865 retirees in the Mainstream, Local Government, State Universal Basic Board (SUBEB), Teaching Service Commission (TESCOM) and other parastatals between May 2019 and last month, Commissioner for Establishments, Training and Pensions Mrs. Ajibola Ponnle has said.

She spoke at the 92nd Retirement Bond Certificate Presentation to retirees of the state public service at Alausa, Ikeja, Lagos.

She said N1.52 billion was credited to the Retirement Savings Accounts (RSA) of 515 retirees last month alongside their monthly contributions.

Mrs. Ponnle noted that the government was paying monthly pension entitlements to retirees  under the Pay As You Go Pension Scheme monthly and Contributory Pension Scheme (CPS)

Presenting the certificates to the retirees, she said the government recognises the plight of workers who have served in the public service and the need to safeguard their financial security after service.

She stated that the Governor Babajide Sanwo-Olu-led administration had  prioritised the prompt payment of the  pension obligations within its resources.

She said: “Despite huge liabilities, we have promptly paid the pension entitlements of retirees under the Pay As You Go Pension Scheme monthly, while LASPEC ensures payment of accrued pension rights to retirees under the Contributory Pension Scheme so our retirees can access their Retirement Savings Accounts (RSAs) without delay.

“Today, under the administration of the governor, the state has, once again, honoured its obligations as stated in the amended Lagos State Contributory Pension Scheme Law, by the presentation of Bond Certificates to the 92nd batch retirees from the state Public Service.

“Let me assure you that Lagos State has not forgotten you. Your welfare and well-being are top-priority and the state government is relentless in its pursuit to improve your retirement life.’’

The Director-General, Lagos State Pension Commission, Mr. Babalola Obilan, added that the efforts of the governor towards the success of the CPS could not be overemphasised.

“Despite rising recurrent expenditure and the current economic climate, the state government has made continuous monthly payments a priority to ensure retirees access their retirement benefits as soon as possible. LASPEC also reviews its business processes to ensure first class service delivery to our dear retirees.”

He urged retirees to beware of any individual or associations that claim to be affiliated with the government and could process or fast-track their pension entitlements for a fee.

AJALA: Greetings to the Director-General of PenCom

and the staff. My name is Ajala, a para-military officer.

I retired in June 2009. My Pension Fund Administrator (PFA) is Sigma Pension.

My complaint is: The non-payment of the 2.5 per cent okayed by the Federal Government and its arrears. Kindly help me.

TAYO: Good day, my name is Tayo. My late mother had two RSA PINS with two different pension managers. How do I go about the matter?

EKPE: My name is Ekpe. I retired from the Nigeria Police Force (NPF) in 2015. My complaint is: On August 2021, I received a message from NPF Pensions that my 2.5 per cent shortfall on pensions approved to federal retirees by President Muhammadu Buhari was credited to my RSA account.

I moved to my PFA, Premium Pension, to confirm and they said there was nothing like that in their system. They advised me to apply to NPF Pensions where I got the information to transfer the fund to my PFA.

This was done on October 20, 2021 and I copied Premium Pensions and PenCom. To my dismay, I discovered that the money was  received by them since July 2021.

But, up till this moment, I have not heard from them. Even though the template was issued by PenCom, Premium Pensions refused to pay us. The most annoying thing is the deduction of their administration fee on receiving the money.

They forgot that this fee is  deducted monthly when pension is paid.

Kindly use your good offices to instruct Premium Pensions to refund the fee and pay the arrears.

OTI: My name is Oti, a former staff member of Skye Bank Plc.

I left the the bank since December 2009 and applied for the 25 per cent of my accrued benefit. But up till now, no response from them.

My letter of non-indebtedness was sent to them from my former employer since January 19, 2022.

I am based in Calabar. But the Calabar office manager refused to pick my calls or talk to me. I have health challenges. I need the money to fund my surgery.

Kindly order them to pay my 25 per cent.

ANNONYMOUS: Last year, l applied for the payment of additional lumpsum of 2.5 per cent, 7.5 per cent and 10 per cent approved by the president to federal pensioners.

Surprisingly, nothing has been done about it.

My PFA, Premium Pension, is not treating us well. They  told us that we should sign an empty template which they had not reflected. Why sign templates then?

I am a retired police officer. Is it a crime to serve this country?

Premium Pension should pay our arrears and others.

THE NATION: The newspaper will intervene. Therefore, Ajala, Tayo, Ekpe, and Oti should look out for the newspaper next week for responses from PenCom.

MRS OKON: I am Mrs. Okon. Before I retired on September 25, 2020, I took promotion interview to Director in the Federal Civil Service. The result came in last year. I have done the verification in my former office. Please, how do I upgrade my pension?

PENCOM: A copy of the promotion letter indicating grade level and step and effective   date should be forwarded to PenCom along with a copy of your registration slip obtained during enrolment.

DANIEL: My name is Daniel and I am a next-of-kin. I received payment of N1,591,877.64 in my UBA account which we believe is RSA contribution with Sigma Pensions. We are waiting for the death/life assurance benefits of the late Mrs Grace. She served over 10 years and died on active service of Fed Poly Idah in February 2015.

 

 

PENCOM: Sir, you are advised to contact Mrs. Ameh’s employer who should process the proceeds of the Group Life Insurance Policy and    ensure payment by the insurance company to her beneficiaries since she died in active service. Thank you.

 

Premium Pension Limited’s Profit after Tax (PAT) has been dropping since 2019.

The Pension Fund Administrator’s (PFA) profit, which stands at N2.55 billion in 2018 financial year, dropped by N302 million in the 2019 to N2.53 billion.

 

This represents a 12 % drop

The downward trend of the company’s profits continued in 2020 and last year compared to 2019 and 2020 financial year by N222 million and N72 million, that is 10 per cent and four per cent drop.

The PFA recorded N2.03 billion PAT in 2020 and N1.95 billion last year.

Going by global accounting standard, a consistent drop in profit is of major concern.

If the situation does not improve, the company risks erosion of its profit, and its survival.

Further analyses of the PFA’s result shows that the major reason for the drop in profit is due to reduction in revenue.

The revenue dropped by N269 million in 2019 but it stagnated in 2020.

Although it improved last year by nine per cent, this was not enough to bring about increase in profit compared to the previous year.

Another reason for the drop in profit can be attributed to increase in expenses, which have been on the rise since 2018. While the PFA’s expenses increased, its revenue kept nose-diving.

Experts said for a company to make profit, its revenue must exceed its expenses.

If expenses outweighs revenue increase, the company may run into losses and its survival will be threatened.

But, the company recorded Assets under Management (AUM) of N885.05 billion in 2021 from N787.80 billion posted in 2020, representing 12.34 per cent growth.

In a statement, the firm’s Head, Corporate Communications, Aliyu Mohammed Ali, quoted the Chairman, Premium Pension Limited, Ibrahim Alhassan Babayo, as stating these at the company’s 17th Annual General Meeting (AGM) in Abuja.

According to him, the total number of Retirement Savings Account (RSAs) registered in the public and private sector organisations as at last December 31, stood at 754,888.

He said: “Of the total RSAs, 453,466 had been funded as at the end of 2021, while the remaining is being engaged for funding.

The company’s Managing Director and Chief Executive Officer, Umar Sanda Mairami, however, assured that the company would be consistent in offering premium experience to its members.

The Pension Fund Operators Association of Nigeria (PenOp) has elected Mr. Olumide Oyetan as its president.

He will head the association for a term of two years.

Oyetan, who is the Chief Executive Officer of Stanbic IBTC PFA, takes over from Wale Odutola, the Chief Executive Officer of ARM Pensions.

Oyetan thanked the outgoing president for a succeessful tenure. He promised to consolidate on the work of his colleague, pledging to proffer solutions to pension challenges.

Other executive members were: Joy Ojakovo (General Manager Progress Trust CPFA)  – Vice President; Dapo Akisanya (CEO Tangerine Pensions PFA)  – Head, Technical Committee; Godson Ukpevo (CEO Veritas Glanvills PFA) – Head, Legal Committee; Idu Okeahialam (CEO Access PFC)- Head, Branding Committee; and Oloruntimilehin George (CEO First Pension PFC)  – Treasurer.

The CEO of PenOp, Oguche Agudah said the change in leadership shows the commitment of the organisation towards continuity and sound Corporate Governance, while being committed to self-regulation.

The new leadership, he said, will continue to work together towards ensuring that ultimately, the pension industry positively affects the lives of millions of Nigerians.

Are you a high-income earner or a low-income earner? In other words, are you an entrepreneur, artist or large-scale business owner in the informal sector? Do you belong to trade associations, unions, non-governmental organisations also within the informal sector?

If yes, you need to grow yourself to be pensionable. A pensionable person is someone who qualifies to receive monthly salary during old age until he or she passes on.

Unlike workers in the formal sector, who have structured pension plan carried out on their behalf by their employers, a person who owns business would need to plan for him or herself.

To be pensionable as a business owner, you need to enroll under the Micro Pension Plan (MPP) and open a savings account. The MPP was designed from the Contributory Pension Scheme (CPS)

Things you need to know

Micro Pension guarantees a secure future through steady income at retirement. It reduces old-age poverty and the process is easy, simple, and flexible.

It has flexible contribution remittances, opportunity to make withdrawal prior to retirement and financial independence at old age.

The Director-General, National Pension Commission (PenCom), Mrs  Aisha Dahir-Umar, explained that the micro pension plan has been well simplified to suit the target contributors.

For instance, she said under the initiative, 40 per cent of the amount contributed can be accessed by contributors for contingency while the balance of 60 percent would be set aside for retirement benefit.

She explained that while contributors could start drawing from their 40 per cent contributions after three months of making the initial deposit, the 60 per cent balance can only be accessed at 50 or during retirement.

The PenCom boss noted that the micro-pension plan will improve the standard of living of the informal sector participants at retirement and reduce dependence on extended family for support at retirement.

She said: “The plan, when operational would capture self-employed people, especially, those with irregular income, usually in the informal sector and are largely financially uninformed with limited or no access to financial services, especially, pension plan.”

Section 2(3) of the Pension Reform Act, 2014 legal framework extends the coverage of the CPS to self-employed persons through the micro-pension scheme.

According to her,  additional benefits to self-employed and informal sector workers include the cover being provided under the Pension Protection Fund.

She explained that under the arrangement, the government would bridge shortfalls or financial losses from the investment of their accumulated retirement savings and guarantee them minimum pension in retirement, irrespective of how much they were able to save before retiring.

She also said the plan would be funded by a yearly subvention of one per cent of the monthly wage of Federal Government’s employees, the yearly levy on PenCom and pension operators as well as pension fund investment income.

The President, Pension Fund Operators Association (PenOp), Mr Wale Odutola, added that the initiative was good.

He stated that they were strategising to reap the gains of the scheme and give hope to self- employed Nigerians and small-scale business operators who would not taste the benefits of pension’s savings or have a chance to save for the future and escape poverty at old age.

The Nigeria Union of Pensioners (NUP) has urged the Federal Government to pay retirees under the Contributory Pension Scheme(CPS) their gratuities as it is done to their colleagues who are under the Defined Benefit Scheme (DBS).

The union spoke against the backdrop of agitations for 75 per cent lump sum payment by some retirees as against the 25 per cent  paid to them by Pension Fund Adminstrators (PFA) from their Retirement Savings Account (RSA) balances.

NUP’s Media and Publicity Secretary, Bunmi Ogunkolade, in an interview with The Nation, said the reasons for the agitation for the increment were that the CPS did not give room for the payment of gratuity by the government to retirees under the scheme.

He said this formed part of their position paper to the National Assembly during the recent public hearing by House of Representatives Committee on Pensions.

He said: “Let the government give retirees under this scheme gratuity as it is done to pensioners under the DBS.The agitation will be greatly reduced, if not totally suppressed.

“This notwithstanding; and to be on a safer side, our Union recommended a 50-50 situation. Let the pensioners go home with 50 per cent of their savings while the balance will be paid monthly,” he added.

He stated that the Union believed that the withdrawal of minimum lump sum of 75 per cent from RSA, if allowed, would affect the scheme.

“It is as good as releasing the entire total sum to the pensioners upon retirement. The scheme is designed to assist pensioners to have something to fall back upon after retirement. If we go ahead to release virtually the entire savings to pensioners upon retirement, then the risk involved will be higher and the repercussion will be very severe.  There should be a balance between the lump sum withdrawal and the amount left to provide for monthly pensions.

“World statistics show us that only about five per cent of the world’s population are said to be rich while the rest 95 per cent are either of the middle class or poor. This parameter shows us obviously that only very few people in the society are gifted with money management skill.

“If per adventure, a pensioner goes home with 75 per cent of his entire savings and the money went down the drain possibly due to bad investment, poor business calculation, wrong visibility studies or any other reasons for that matter, where is the fall back position for such a pensioner and we will all come back to blame the government of the day,” he noted.

IZUATA: My name is Izuata, a retired Assistant Superintendent of Police (ASP). I was paid a pitiable lump sum while another amount was left in my account.

Yet, junior officers who went to PenCom’s office were paid higher than I.

I am bedridden.That is why I am using this forum to appeal to the PenCom management to pay my accrued sum to enable me build a house for my children.

PENCOM: Please be informed that your retirement benefits, which include your lumpsum and monthly pension, were computed based on your RSA balance as at February 2012. Please be informed that the RSA balance is for pension.

BROWN: Good day, I am D.S.C. Ukeje. I have been going to Stanbic IBTC to get my 7.5 to 10 per cent increase, which was okayed by Mr. President,  for pensioners.

Stanbic IBTC has refused to give us the money. We plead with PenCom to pressurise it to pay us.

Even the Nigerian Custom Service (NSC), where we retired from in 2016 has forgotten us. Worse still, our rank mates who are still in service are well paid. If this money is not paid, we will take the law into our hands during a visit to the company.

PENCOM: Please forward your Retirement Savings Account (RSA) PIN, Pension Fund Administrator (PFA) as well as other vital information to enable the commission investigate further. Thank you.

AJALA: Greetings to the Director-General of PenCom and staff of The Nation.

My name is Ajala, a para-military officer. I retired in June 2009. My Pension Fund Administrator is Sigma Pension. My complaint is about the non-payment of the 2.5 per cent increase in pension approved by the Federal Governmnet and the arrears.

TAYO: Good Day, my name is Tayo. My late mother had two RSA PIN numbers with two different pension managers with funds in each account. How do I go about processing her benefits? Kindly help.

EKPE: My name is Ekpe. I retired from the Nigeria Police Force (NPF) in 2015.

My complaint is: On August 2021, I received a message from NPF Pensions that my 2.5 per cent shortfall on pensions approved for federal retirees by Mr. President was credited to my RSA account.

Then I moved to my PFA (Premium) to confirm it. They said there was nothing like that in my account. They advised me to apply to NPF Pensions where I got the information to transfer the said amount to my PFA.

This was done on October 20, last year and copied Premium Pensions and PenCom for neccessary action.

To my dismay, I discovered that the money was received by them as far back as July, last year. Yet, up till this moment, I have not  heard from them concerning payment, even though a template was issued by PenCom.

The most annoying thing is the  deduction of their administrative fee on receiving the money into their account and denied me payment. They forgot that this fee is deducted  monthly when the pension is paid.

Kindly use your good offices to instruct Premium Pensions to refund this deduction no matter how small and pay retirees. Thank you.

OTI: My complaint is against the IEI Anchor Pension Managers Limited. I am a former staff member of Skye Bank Plc, which service I left in December 2009.

I applied for my accrued benefit of 25 per cent since November, last year. Up till now, no response from them. My letter of non-indebtedness was sent to them from my former employer since January 19, this year.

I am in Calabar but their Calabar office manager refuses to pick my calls or talk to me. I have health challenges and I need the money to go for surgery.

Please, use your good offices to order IEI Anchor Pension Managers Limited to pay my 25 per cent which I started processing since last year.

LADIPO: Dear Omobola, I refer to  a report entitled: “Allow workers to use pension savings for home ownership”.

It stated that we should beware of a selfish and destructive move to enact a law that will allow workers who have spent 15 years in service to access their pension accounts and use such to acquire houses.

The Nation, March 14, Page 23 notes that the government is augmenting pension savings for aged/retired workers not to die in hunger and as paupers. Houses so acquired tie down pension savings and they can easily be sold or re-purchased.

While such unfortunate pensioners had been lured. What is PenCom’s position about this?

ANNONYMOUS: Last year, l applied for the payment of additional lumpsum of 2.5 per cent, 7.5 per cent and 10 per cent increases okayed by the President for federal pensioners.

Surprisingly, nothing has been done to that effect and my PFA, Premium Pension, is not treating us well. They send us messages that we should come and sign an empty template which they have not reflected with any addition. What is the importance of signing the template?

I am a retired police officer. Is it a crime to be a police officer in this country? We suffered for this country so Premium Pension should pay us our arrears of 2.5 per cent and others.

MRS. DANLADI: Greetings. I am a retiree of the Nigerian Railway Corporation, Lagos. My complaint is about those of us who retired in June, last year. When are we expected to be paid our lumpsum by our PFAs?

THE NATION: The newspaper will intervene. Therefore, Ajala, Tayo, Ekpe, Oti, Ladipo and Mrs Danladi should look out for the newspaper next week for responses from PenCom.