Category: Pension

The exemption of members of the Committee who executed  the Contributory Pension Scheme (CPS) has set a bad precedence for the scheme, The Nation has learnt.

The source said this is because the retired Heads of Service of the Federation, Accountants-General, Auditors-General, Permanent Secretaries, Directors General of Government Agencies, among others, who supervised the implementation of the CPS were exempted from the scheme.

According to the Nigeria Union of Pensioners (NUP), these retirees are enjoying higher pension payout under the old scheme – the Defined Benefits Scheme (DBS).

In a Memoranda to the House of Representatives Committee entitled: Pensions on A Bill for An Act to Amend the Pension Reform Act to Provide For Exemption Of The Nigeria Police Force From The Contributory Pension Scheme (CPS) and Amend Sections 1(C), 7(2), 8(I), 18, 24 And 99 of The Act to Allow Pensioners to Withdraw At Least 75 per cent of Their Retirement Benefits obtained by The Nation, the NUP stated that the National Assembly should review the CPS and restore those exempted from it.

The NUP said though it does not oppose the removal of the Nigeria Police from the CPS, it criticised the removal of the Armed Forces, Intelligence and Department of State Services (DSS).

The NUP said the Federal Government that claimed it had not enough funds to keep the old DBS curiously  exempted these retirees from the CPS.

The memoranda read: “Not only that, 10 years after, the same government granted members of the Armed Forces, Intelligence and Department of State Services exemption from the new scheme and returned them to the old scheme. It is not surprising, therefore, that there is yet another call by the National Assembly to further amend the PRA 2014, to provide for the exemption of the members of the Nigeria Police Force from the Contributory Pension Scheme.

“The Nigeria Union of Pensioners (NUP) finds this development very worrisome. It is worried about the unfolding events in the Contributory Pension Scheme and its future.

“It is not out of place to submit to this House that the CPS is not good enough for pensioners.We reasoned too that, if the Scheme was favourable and so good to pensioners as the Defined Benefits Scheme (DBS), why are the proponents of the Scheme, the Heads of Service, the Permanent Secretaries, Accountants-General, Auditors-General etc., the same people that mooted, studied and recommended the Scheme to our government exempted themselves from the same Scheme.  Respectfully, we want the leadership of the National Assembly to ponder on this observation.

“We submit further that if the NPF, like their military counterparts and others are exempted from this Scheme, it will definitely not bring to an end further agitations by other para-military organisations and other civilian groups to exempt the Scheme.

‘’It is our humble submission and appeal to the National Assembly to  look at the problems of the Scheme and resolve it, and bring back those that were already exempted from the Scheme, rather than exempting each group as they continue to agitate for exemption.

“Let us research into the reasons behind the agitations to leave the Scheme by some group of pensioners which may not be far from the cumbersome administrative bottle necks experienced by retirees in accessing their money after retirement. These bottlenecks are caused by the Pension Fund Administrators (PFAs), which must be addressed by the National Assembly.’

“However, if the Police Force is allowed to pull out of the Scheme like others, there is every tendency that the civil and public servants may also seek for exemption enmasse, and that will be the end of the Scheme.”

NUP noted that between 1999 and 2002, the Federal Government discovered that it could no longer sustain payment of retirement benefits to its retired workers, including those of the Armed Forces.

“Those days witnessed retired soldiers sleeping under bridges, and in some major streets of Abuja to demand  their unpaid retirement benefits. It was during that time that the government decided to seek for a sustainable future pension scheme that is sustainable enough to cater for employee’s retirement benefits.This gave birth to the CPS, which is said to have been borrowed from Chile, South America.

“The shift from the DBS to the CPS declared a state of emergency in the pension sector economy. Such certainly called for understanding from employees of government.

‘’Hence, the Pension Reform Act 2004 gave no room to any exemption of any employee of government from the succeeding new pension regime, the CPS,” the union added.

AIICO Pension has announced the change of guards at the company. It will now be referred to as FCMB Pensions.

It was also gathered that all management staff of AIICO Pension have left the company, including the Managing Director, Eguarekhide Longe.

FCMB Pensions has a new Managing Director. It is Christopher Babatunde Bajowa, whose appointment has  been okayed by the National Pension Commission (PenCom).

In a statement, FCMB Pensions  stated: “We are pleased to inform you that AIICO Pension Managers has merged with FCMB Pensions Limited, a leading Pension Fund Administrator. Consequently, AIICO Pension will now be referred to as FCMB Pensions, a member of the FCMB Group.

“With this merger, we reassure all our valued customers of safety of funds, sustained and competitive return on investment, more service outlets, FCMB Group offering and better customer experience.”

However, FCMB Pensions did not show or name its new board and management.

In the majority stake takeover, FCMB Pensions bought 26.1 per cent stake held by other shareholders in AIICO Pensions, thereby making FCMB Pensions a majority shareholder with 60 per cent stake in AIICO Pensions.

This is in line with the approval from PenCom, which ordered Pension Fund Administrators (PFAs) to raise their minimum share capital base from N1 billion to N5 billion by April 12, 2022.

A notification by FCMB Group Plc through a corporate disclosure to the Nigerian Exchange Limited (NGX) last year affirmed that it had purchased a 60 per cent stake in AIICO Pension Managers.

AIICO Insurance also confirmed the announcement with a notification to the NGX and the public that it had sold 33.9 per cent of its shareholding in AIICO Pensions, which added to the 26.1 per cent FCMB bought from other shareholders in the company made FCMB a majority shareholder. This was lower than a 70 per cent stake earlier stated to the NGX.

FCMB said: “The acquired stake was reduced from the initial 96.3 per cent stake in our notification to the NGX on June 25, 2020 to comply with the transaction structure approved by regulators.”

The company added that the acquisition was to combine the activities of its pension management subsidiary, FCMB Pensions Limited, with that of AIICO Pensions to build a stronger and more resilient business.

AIICO added: “In line with the approval from the National Pension Commission, the transaction is subject to a merger of AIICO Pensions and FCMB Pensions.

“This is in compliance with the PENCOM’s circular ref: PENCOM/INSP/CIR/SURV/15/03 of September 21, 2015, which states that ‘no individual, group of individuals or company shall have direct or indirect ownership/shareholding of five per cent and above in more than one licensed Pension Fund Operator’.

“Therefore, following this sale, AIICO Pensions ceases to be a subsidiary of AIICO Insurance and has now become an indirect subsidiary of FCMB Group Plc.”

Meanwhile, the management of AIICO Pension bid their clients farewell in a statement last week.

The statement read: “We are pleased to announce that from February 21, 2022 AIICO Pension Managers (AIICO Pension) will officially be integrated into FCMB Pensions Limited (FCMB Pensions) and will begin conducting its business as FCMB Pensions.

“We began our journey in February 2005 with our incorporation as a business and announced our entry into the Nigerian pension industry in April 2006, when we were licensed as a Pension Fund Administrator by the PenCom. Our growth over the past 16 years has been predominantly organic relying largely on referrals of our client base.

‘’Over the years we have also attracted high-quality, committed professionals and invested in their training, development and growth. As a result of these efforts, we have experienced significant growth over the past 16 years. This has been in no small way also directly because of the trust you have reposed in us to manage not just your present but more importantly your future.

“As we have dutifully mentioned in previous communications, we decided to combine our business with that of FCMB Pensions because we strongly believe that a larger organisation will allow us to provide a wider array of services, more depth in managing your investment portfolio and also ensure that our combined share capital exceeds the National Pension Commission’s newly prescribed minimum share capital requirements for Pension Fund Administrators of N5 billion.

It continued: “FCMB Pensions hold true to the same innate values that we do; integrity, customer centricity, diligence and professionalism. As a result of this synergy of values (as an AIICO Pension customer) you will continue to enjoy the excellent service quality you are accustomed to albeit on a larger scale. From February 21, 2022, when we officially become FCMB Pensions, we will be able to provide you many new services and areas of expertise. We look forward to discussing those in more depth with you. However, there are several things we want to point out that will not change:

“Your Personal Identification Number (PIN) remains valid. Your personal, contributions and withdrawal records remain intact.

We have ensured that you will continue to work with experienced and courteous account officers. Our fee structure will not change.

The services we have provided you in the past will continue to be improved and offered by FCMB Pensions. We will be moving some of our offices to FCMB Pensions’ and our contact centre phone numbers and email addresses will continue to be operational for the time being although we anticipate consolidating phone numbers as soon as possible in the near future.

“You have always been at the centre of everything we have done over the past 16 years and we did this for YOU.  We salute your fierce dedication to our brand and we look forward to improving same when we make you happy you with our service offerings as FCMB Pensions. We are excited about the future and we are glad to have you with us on this journey,” the company added.

Retirees and prospective retirees of the Nigeria Police  should not be allowed to exit the Contributory Pension Scheme (CPS) to Defined Benefits Scheme DBS, a Non-Governmental Organisation (NGO) Contributory Pension and Happy Retirement Advocacy (COPEHRA), has said.

It made the submission at the ongoing Public Hearing to Remove Police from the Contributory Pension Scheme (CPS).

A member of the NGO Project Advisory Team, Mahmud Ayinla, said the grievances of the police could be addressed in the CPS.

He said one of the problems is the poor monthly pension of an officer grade in CPS compared to his counterpart in DBS who gets pension pension.

He said this meant the government should increase the funding of the Retirement Savings Account (RSA), not to take over the pension payment.

Stating the reasons the police should not be allowed to quit the CPS, Ayinla, a lawyer, cited global best practice, issues of unfunded pension liabilities; statutory government disbursements/deliverables, sustainability and cost of governance, governance by regulations, transparency, and self-regulation.

He explained that since the global crisis in pension management,  caused by funding, Latin America has led in policy reforms that have had their pensions management and administration switch from the pay-as-you-go/Defined benefit system to the CPS where workers and employers contribute to a fund to be invested in assets.

Ayinla added that the divergence in pension administration from its being the sole responsibility of the government or employer to a joint contributing system ( RSA) has been met with an increase in patronage and adoption world over, be it in the private or public service.

On the issues of unfunded pension liabilities, statutory government disbursements/deliverables, he noted that the government is saddled with the recurrent statutory expenditures as well as providing funding for capital projects.

On sustainability and cost of governance, he said there was no sustainability in budgeting for a monthly pension, adding that the sustainability of a non-terminal pension scheme such as the defined benefit scheme in the midst of the various modern challenges in a developing country like Nigeria is simply non-existent.

ANNONYMOUS: I am a retired police officer. Last year, I applied for the payment of arrears of 2.5 per cent approved by the President to retirees’pensioners of federal ministries/parastatals, which was not paid to some of us under Contributory Pension Scheme (CPS).

I read in The Nation that the cash has been paid to our PFAs through PenCom. To my dismay, Premium Pension, my PFA, has not implemented the payment. Please when are we going to be paid?

PENCOM: Please provide your RSA PIN.

HUSSAINI: Good day, Omobola. My name is Hussaini. I was a staff member of the Revenue Mobilisation Allocation & Fiscal Commission. I retired on February 1, last year. I was verified  last November 18,  and was issued with Retirement Benefit Enrolment Slip.

My questions are: When will I  collect my lumpsum and receive monthly pension? Am I going to be paid monthly pension arrears from February, last year to date?

PENCOM: Please provide your RSA PIN.

ATINSHOLA: My name is Atinshola. When I resigned from Sterling Bank in 2018, 25 per cent of my savings was paid immediately and another 25 per cent when I was 50 by Crusader Sterling Pension.

I urge my pension manager to pay the balance to enable me fund my children education, pay my rents and also attend to other needs.

PENCOM: Please note that this will not be possible due to the fact that you have been given a total of 50 per cent of your RSA balance (25 per cent when you resigned and 25 per cent upon attaining 50 as you  stated above). The remaining amount in the RSA will be applied to the payment of your monthly pension.

Kindly visit your Pension Fund Administrator (PFA) who would assist you further. Thank you.

ANNONYMOUS: Good day, Crusader Pension is frustrating me because I demanded that my funds be transferred to another pension manager. Though its official asked me to give a month notice, it rejected the letter from TrustFund, my new pension until the notice expires. Kindly advise me.

PENCOM: Please provide your RSA PIN.

SUPOL BROWNSON: Hello, I am SUPOL Brownson, a retired Assistant Superindent of Police (ASP). I retired on the April 4, 2019. Though I was verified by PenCom officials in August 2018 at the University of Port Harcourt, I have not been paid. Please help me.

PENCOM: Please provide your RSA PIN.

SHIDALI: Good day, I appreciate your good work to  retirees.

I did my verification with my PFA Leadway Pensure. After the exercise, I was sent  a small amount as my closing balance. Later, a smaller amount was sent to me.

I want to know about the balance.

I look forward to hearing from you. Thank you.

PENCOM: Please provide your RSA PIN

MRS OKON: I am Mrs. Okon. Before I retired on September 25, 2020, I took a 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, the next-of-kin to Mrs Grace Ameh,  who died after 10 years in the service of Federal Polytechnic, Idah.

I received some money in my UBA account as her RSA contribution with Sigma Pensions. We are awaiting the death/life assurance benefits of the late worker.

PENCOM: 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.

ANNONYMOUS: Good day, please when will those who retired last year get their lumpsum? Thank you.

PENCOM: Please tell them to provide their RSA PIN.

ALAKE: Hello, my name is Alake, a retiree of Lagos State University (LASU). l retired on February20, last year. My pension administrator is NUPEMCO.

It is a year since l retired. l have submitted the required documents. I was only told to be patient. But I have nothing to sustain me. Please help me. Thank you.

PENCOM: Please provide your RSA PIN.

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

But, junior officers who went to PenCom office were paid higher than I.

I am bedridden. I am using this forum to appeal to PenCom management to pay me the accruing sum.

PENCOM: Please provide your RSA PIN.

Two hundred and twenty-two retirees who are under the Contributory Pension Scheme (CPS) in Lagos State have been paid N1.04 billion, the Director-General, Lagos State Pension Commission (LASPEC), Babalola Obilana has said.

He made this known during the Presentation of Retirement Bond Certificates to the 91st batch of retirees at Alausa, Ikeja.

He said praised the efforts of Governor Babajide Sanwo-Olu towards the success of the CPS. He maintained that despite the challenges, the government had made  efforts to prioritise monthly payments and ensure retirees access their retirement benefits.

He said the state government recognised the dedication of public servants and was compliant in the remittance of pension contributions into individual employees’ Retirement Savings Accounts (RSA).

He said: “We are happy to note that Lagos State is one of the few states in the federation that does not owe monthly pension contributions. Both employees and employers’ contributions are remitted promptly after salaries are received. Governor Sanwo-Olu takes matters concerning retirees to heart and as such pension contributions are prioritised in the State’s Annual Budget.

“Also, LASPEC reviews its business processes to ensure first-class service delivery to retirees because it is a service-oriented organisation.The administration is working tirelessly towards ensuring that retirees’ backlogs are paid before the end of the present administration’s first term and the Commission is focused on accomplishing Mr. Governor’s goal of the immediate payment of pension entitlements upon retirement from the Public Service.”

He urged that the Commission be informed of any retiree who might have one ailment or the other to fast-track the payment of their entitlements.

He enjoined retirees to shun people forming associations and requesting a fee to  quicken the payment of their  benefits.

MRS ANEKE: I will like to thank The Nation  and PenCom. This is because at, last, my late husband’s pension benefit has been paid. My tears have been wiped off my face.

My late husband worked in the Aviation Authority before he passed on.

He died on October 5, 2019 and we were sent out of the official quarters  on April 3, 2020. His benefit was with First Guaranty Pension Limited. I really suffered with my children. But the newspaper came to my assistance. May God continue to bless you for your kindness.

THE NATION: We are happy your pension benefit has been paid. We are poised to put smiles on the face of pensioners and their next-of-kin who encounter challenges in getting their  benefits.

ANNONYMOUS: I am a retired police officer. Sometime last year, I applied for the payment of the arrears of 2.5 per cent approved by the President to federal ministries/parastatals pensioners, which was not paid to some of us under the Contributory Pension Scheme (CPS).

I read in The Nation that the benefit has been paid to our PFAs through PenCom.

But to my dismay, Premium Pension, my PFA, has not implemented the payment.

Please, can I know why we have not been paid?

HUSSAINI: Good day, Omobola. My name is Hussaini. I was a staff member of Revenue Mobilisation Allocation & Fiscal Commission. I retired on February 1, 2021. I was verified on November18, 2021 and issued with the Retirement Benefit Enrolment Slip.

My questions are: When am I going to collect my lumpsum and start receiving my monthly pension? Am I going to be paid monthly pension arrears with effect from February 2021?

ANNONYMOUS: How long does it take to transfer Accrued Pension Rights to PFA’s RSA? Thanks.

ATINSHOLA: My name is Atinshola. I resigned from Sterling Bank. 2018. Twenty-five per cent of my pension was paid immediately and another 25 per cent when I was 50 by Crusader Sterling Pension.

I need my pension manager to pay my balance to fund my children education, house rents and attend to my domestics needs.

ANNONYMOUS: Good day, Crusader Pension is frustrating me because I demanded that my funds be transferred to another pension manager. It asked me to give them a month notice and rejected the letter from TrustFund from my new pension until a month. Kindly advise me.

SUPOL BROWNSON: Hello, I am Supol Brownson, a retired Assistant  Superintendent of Police (ASP). I retired on April 4, 2019 and was verified by PenCom officials at the University of Port Harcourt.

It’s two years and eight months after, yet no payment. Please help me.

SHIDALI: Good day, I appreciate the good work you for retirees.

I did my verification with my PFA-Leadway Pensure. After that, I was sent   some money as my closing balance. Later,  a smaller amount was paid in.

I want to know about the balance. I look forward to hearing from you. Thank you.

MRS OKON: I am Mrs. Okon. Before I retired on  September 25, 2020, I took a 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?

ANNONYMOUS: As a pension reform Act 2004, my complaint is that I have received a congratulatory message from my PFA, Fidelity Pension Manager, Ilorin on my birthday. I am 50 but my payment has not been remitted to my RSA.

BROWN: My name is Brown. I was born on February 19, 1965 and retired from the Nigerian Customs Service on August 6, 2016. My PFA is Stanbic IBTC Pension Managers Limited.

I am scared of hunger after serving my fathers’ land without blemish. Please help to expedite action on the payment of my benefit.

DANIEL: My name is Daniel and  am a next-of-kin to Mrs Grace, who died in active service after over 10 years at the Federal Polytechnic, Idah in February 2015.

I received some amount my UBA account as her RSA contribution with Sigma Pensions.

We are awaiting her death/life assurance benefit.

ANNONYMOUS: Good day, please when will those of us who retired last year get our lumpsum? Thank you.

ALAKE: Hello, my name is Alake, a retiree of the Lagos State University (LASU). l retired on February 20, 2021 and my pension administrator is NUPEMCO.

By February 20, this year, it was a year since I quit service. l have submitted  the required documents. I was only told to be patient without nothing for sustenance. Please help me. Thank you.

IZUATA: My name is, a retired Assistant Superintendent of Police (ASP). I was paid a pitiable amount as lump sum while junior officers who went to PenCom’s office were paid higher.

I am bedridden. I am using this forum to appeal to PenCom management to pay me the accrued sum to enable me build a house before I die.

THE NATION: The newspaper will intervene. Therefore, Hussaini, Atinshola, Supol Brownson, Shidal, Mrs Okon, Brown, Daniel, Alake and ASP Izuata should look out for the newspaper next week for responses from PenCom.

The agitation for the withdrawal of 75 per cent pension lump sum payment is wrong, Managing Director, IEI Anchor Pensions Managers, Mr. Glory Etaduovie.

Etaduovie in a report said the upfront payment is illusory and distractive.

He added that a nation that saves and invests well, grows, which is what  is one of the objectives of pension.

Etaduovie, who said pension boosts infrastructure investment and development, stressed that it bridges critical development gaps.

He said: “It is a buoy for the capital market, stimulating growth in the economy and the employment. This fund must be jealously protected. The ratio of pension assets to the Nigerian Gross Domestic Product (GDP) was just eight per cent as at end of 2020. This is far from what obtains in the world. Netherlands was 214 per cent in 2020; United States was 156.5 per cent; South Africa 78.8 per cent; and South Korea 61 per cent.

“This subject of 75 per cent upfront pension lump sum payment agitation for retirees has been reverberating in the recent past. It is of grave concern for all, the industry, the public, the government and even the pensioners. Some industry members and experts have wondered if what is being requested for is properly understood. Ordinarily, nothing should be wrong with taking what is yours legally.

“The fact that you live long enough to receive any part of your pension in your account is exciting. It is well deserved, having worked and earned it. However, is the easy way out seemingly the best? Who does not like the good feeling of some good money ‘cooling’ in his or her account? The answer lies in understanding the purpose and intention of pension.”

He explained that pension is a reward and recognition of workers for aging on the job and a need for a soft landing after active work years.

“The employer, government or private sector as defined by the law is mandated to make such provision. This collective social security arrangement is to attend to and fend off the burden of later life social and health challenges on aged citizens from the governments already over-burdened other responsibilities. Because of the failure, abuse and burdens of the previous Defined Benefits System, (DBS), a novel Contributory Pension Scheme (CPS) evolved based on the pension Act of 2004 and its reform of 2014.

“Without doubt, a novel idea, no matter how beautiful, will continue to be relevant by responding to the dynamics of the times. It is a kind of public-private synergy for higher efficiency and guarantees. The Nigerian system requires that employer and employee contribute agreed minimum percentages into a managed fund determined actuarially predetermined by the Act guiding pension management, for investment, security, and growth over a period.

“The longer the years of participation, the higher the accumulation, the better for investment returns and benefits size. Some present complaints on the size of the individual pension fund at retirement is because of the relatively short period the CPS has been in operation.The longer one is in participation in years of service, the larger the accumulation, the better the returns on investment on compounded basis.”

He said the third reason people think they need the lumpsum is because of lack of trust in the system.

“In many instances, they think that their money is safer being in their hands and the liberty that comes with it. In some other cases, retirees want to cover for a perceived gap or failure in their retirement plan using a huge part of their pension. This may be to build a house or some huge project. Pension is not meant for those. As much as possible, these should be carried out before the retirement age.

‘’Twenty-five per cent upfront approved by law may be agreeable to complete outstanding projects, but not 75 per cent. The future is gone if 75 per cent is taken. What is left as guarantee for the monthly income, especially when health is becoming challenged? There will be no guarantees with the ever-growing inflation with what is left. The buying power is ever decreasing, the way it is now.

“Sadly, the majority of people live a day-to-day life and plan poorly for their retirement. They delegate and relegate that important function to their employer, only to discover very late how wrong that posture has been. Very few employment places may give you that latitude of laxity. How can one leave his future and destiny in another person’s hand? Thus, people who are poorly prepared, make these agitations and concerns. It is result of poor planning and visioning. We have other people who have wondered why the pension could so much be accumulated to one industry, and still counting.

“They have their imaginations on what they could do with the money. But, because of the tight guidelines of the funds management and how tightly impenetrable it has been, some people have sworn to break the tight rein on the funds, out of possible envy. This may be possible only by law. Thus, the various ‘hacking’ attempts this far,” he added.