The Nation Newspaper

Category: Pension

  • PFAs pay 6,862 disengaged workers N3.6b

    PFAs pay 6,862 disengaged workers N3.6b

    By Omobola Tolu-Kusimo

     

     

    A total of 6,862 workers with pension contributions under the Contributory Pension Scheme (CPS), who lost their jobs, were paid 25 per cent of their contributions in the Second Quarter, The Nation has learnt.

    A report entitled: “Second Quarter, 2020 Summary Report by the National Pension Commission (PenCom)” stated that Pension Fund Administrators (PFAs) paid the disengaged workers N3.67 billion.

    According to the commission, the disengaged employees are under 50 and were unable to secure another jobs within four months of disengagement.

    The report reads: “Approval was granted for payment of N3.67 billion to 6,862 Retirement Savings Account (RSA) holders who were under the age of 50 years and were disengaged from work and unable to secure another job within four months of disengagement.

    “The cumulative total number of RSA holders who were paid benefits for temporary loss of job was 331,003 and were paid a total of N116.88 billion being 25 per cent of the balances of their RSAs as prescribed by the Pension Reform Act

    “A further analysis showed that the private sector accounted for 95.17 per cent of those who benefited from these payments while the public sector accounted for 4.83 per cent.”

    Similarly, the commission approved N7.66 billion for the payment of death benefits to the beneficiaries of the 1,936 deceased employees during the quarter under review.

    This brings the number of deceased employees from both public and private sectors to 59,057.

    The amount paid during the quarter as death benefits is N186.21 billion.

     

  • ‘New Life Annuity rules by PenCom, NAICOM will end demarketing’

    ‘New Life Annuity rules by PenCom, NAICOM will end demarketing’

    By Omobola Tolu-Kusimo

     

    STEPS taken by the National Pension Commission (PenCom) and the National Insurance Commission (NAICOM) in addressing challenges affecting the marketing of Retiree Life Annuity (RLA) and Programmed Withdrawal (PW) will avert demarketing in the two subsectors, the Executive Director, Centre For Pension Right Advocacy, Ivor Takor, has said.

    He made this known in a report entitled: “Pension Reform Act 2014: The Revised Regulation on Retiree Life Annuit.’’

    Takor, who applauded PenCom and NAICOM for the rules, stated that the steps would help promote both businesses.

    He said: “As a member of the Fola Adeola-led Pension Reform Committee, whose work ushered in the CPS through the PRA 2004, I was quietly happy that annuity was being sold to employees as it will give them an option, which was the spirit behind the provisions of Section 7(1) (b) and (c).

    “Section 7(1) provides that a holder of a Retirement Savings Account (RSA) shall, upon retirement or attaining the age of 50 years, whichever is later, utilise the amount credited to his retirement savings account for withdrawal of a lump sum from the total amount credited to his RSA provided that the amount left after the lump sum withdrawal shall be sufficient to procure a programmed fund withdrawals or annuity for life in accordance with extant guidelines  by PenCom, from time to time; Programmed monthly or quarterly withdrawals calculated on the basis of an expected life span; and annuity for life purchased from a life insurance company licensed by NAICOM with monthly or quarterly payments in line with guidelines jointly issued by PenCom and NAICOM.’’

    Takor said he was, however, worried about the misinformation by marketers on the life span of PW.

    According to him, the challenge of implementing Section 7(1)(b) and (c) has to do with the marketing and de-marketing of the PW and Annuity by operators and their agents.

    He noted that PFAs, who provide PW, are in a vantage position over life insurance firms that provide annuity.

    ‘’They are the only operators who  interface with contributors through interactive forums with employees in their places of work. RSAs are opened with them; employee data are with them, and moreover, any retiring contributor’s first port of call is the office of the PFA,’’ he added.

    He continued: “Some PFAs, therefore, took it for granted that a retiree will automatically choose PW since annuity was almost alien to contributors. That actually was the case during the first two years, when employees started retiring under the CPS. The tide started changing when life insurance companies came on board and they came in very forcefully. I can say that with all authority because I was one of those who several agents of life insurance companies marketed annuity to. Their attack on PW was vicious. I cannot for sure say whether the misinformation they were dishing out about PW was based on ignorance or deliberate. All I can say is that their styles are the same irrespective of the company they are marketing for.

    “However, I was very worried about the misinformation the marketers were dishing out with regards to the life span of PW. We were being told that PW ends after 15 years. How they arrived at that conclusion, I don’t know except that it was a strategy to de-market PW. This discussion will not delve into the high and low points of either PW or RLA.”

    He said when it became glaring to PFAs that life insurance companies have arrived to share the market with them, and that PW, their product, was being de-marketed in favour of Annuity, some of them felt it was time to go after the product.

    “Unfortunately for them, their intention to de-market Annuity cannot go the way of annuity agents. They have to contend with the provisions of Section 83(3), which provide that PenCom shall ensure that all information in brochures, advertisements, promotional materials and claims of PFAs are truthful in every way without omission of any fact which may make the information contained therein misleading, false or deceptive.

    “They therefore resorted to delays in transmitting request for RLA to PenCom for approval. Unfortunately for PFAs, life insurance companies succeeded in putting some staff of PFAs in their pay rolls. These staff give the companies data of retiring staff including their phone numbers and discreetly market RLA to retirees on behalf of “their” life insurance companies”, he added.

    PenCom and NAICOM, in a document, entitled: Revised Regulation on Retirement Life Annuity Pursuant to the Pension Reform Act (PRA) 2014, said reported and investigated cases of unfair and unethical practices, such as misinformation, de-marketing and mis-selling by Pension Fund Administrators (PFAs) and Retirement Life Annuity (RLA) providers (Life insurance operators) shall henceforth attract severe sanctions.

  • Micro pension contributors hit 53,827

    Micro pension contributors hit 53,827

    By Omobola Tolu-Kusimo

     

    THE number of self-employed persons saving for retirement benefit under the Micro Pension Plan (MPP) since the commencement of the plan in March, last year, has reached 53,827, The Nation has learnt.

    According to a report by the National Pension Commission (PenCom), these contributors have consequently saved N4. 8 million in their Retirement Savings Account (RSAs).

    The savings came under the Contributory Pension Scheme (CPS) based on the extension of coverage for MPP by the Pension Reform Act (PRA) 2014.

    The Director-General, PenCom, Mrs. Aisha Dahir-Umar, reiterated that the PRA 2014 expanded coverage of the CPS to the self-employed and persons working in organisations with no fewer than three employees.

    She said: “As this category of workers constitutes the larger percentage of the working population in the country, there is no doubt that to achieve the pension industry’s strategic objective of covering 30 per cent of the working population in Nigeria under the CPS by the end of 2024, efforts should be on deck to extend coverage to this important segment of the economy.

    “In addition, due to their widely dispersed nature and generally low and irregular incomes, there is the need to provide a pension plan that would meet their special characteristics. In this regard, the Micro Pension Plan initiative has been conceived within the context of an industry wide strategy to bring this class of workers on board.

    “In implementing this initiative, the informal sector has been segmented into three categories, which are low income earners, the high income earners and the Small and Medium Enterprises (SMEs). Each of these categories is going to be targeted with appropriate pension products and sensitisation programmes that meet their peculiarities.”

    She stated that a robust technological platform that would support customer services is necessary to register, collect contributions, provide RSA support, pay benefits and offer financial advisory services to these workers.

     

  • PTAD: 222 NAHCO’s ex-workers get N141.3m

    PTAD: 222 NAHCO’s ex-workers get N141.3m

    By Omobola Tolu-Kusimo

     

     

    IF the 1130 verified former workers of the Nigerian Aviation Handling Company (NAHCO) Plc, 222 have been paid their severance benefits, the Executive Secretary (ES), the Pension Transitional Arrangement Directorate (PTAD), Dr Chioma Ejikeme, has said.

    Ejikeme said the former workers were paid N141.38 million in four batches, between June 19 and July 28.

    She said the computation and payment of the benefits would resume as soon as the adjustments were completed and tested.

    She stated that a total of 1,130 former workers were cleared during the national verification for Parastatals Pension Department (PaPD) pensioners, which was concluded last November.

    She added that following the review of the verification database of former workers before the exercise, they were able to break down the verified numbers.

    According to her, out of the 1,130 ex-workers, 786 are qualified, 103 are not qualified, 162 names were duplicated while 79 files were flagged for further investigation.

    She noted that considering the 786 former workers that were classified as qualified, and  of 222 ex-workers paid, there remained 564 former workers files to be reviewed and computed.

    Since the severance entitlements payable is a function of the respective ex-workers career records and date or details of promotion, she pointed out that it is not possible, at this stage, to determine the amount outstanding to be paid until each of these ex-workers files are completely computed.

    She stated that PTAD does not have any approved amount for the former workers of NAHCO neither has it received any fund for the payment of their severance benefits.

    She maintained that the pay-ments made so far to this category of former workers had been funded from the Directorate’s savings from pension releases for the payment of monthly pension to pensioners.

    Explaining how the Directorate computes beneficiaries’payouts, she said their computation model is based on entitlements defined in the NAHCO’s Staff Conditions of Service Handbook.

    She said: “In addition, we have added some terminal benefits mentioned in Public Service Rules (PSR), 2008 Edition, which have not been stated/defined in the NAHCO Staff Conditions of Service Handbook. In view of this, the entitlements computed for each NAHCO’s ex-staff or the next of kin (NOK) as applicable comprises Long Service Gratuity subject to achieving a minimum of 10 years in service; leave allowance subject to achieving at least six months in service; one month salary in lieu of notice; disengagement allowance; and repatriation allowance.

    “Every beneficiary that subscribes to SMS alert with his or her bankers will receive SMS notification of payment into his or her account. However, to get clarity about the details of the computation and parameters adopted towards determining the amount paid, the Directorate is working on getting the email address of each beneficiary, so as to send a scanned copy of the computation print out for their record.”

    She further said the Directorate, as part of its due diligence protocol for on-boarding of new or existing pensioners, liaises with relevant agencies to collate relevant data, such as nominal roll, salary structure, conditions of service, details of previous payments etc. on the affected former workers.

    “In this instance, the Directorate had, through its collaboration with Bureau of Public Enterprise (BPE), that was responsible for the privatisation exercise and NAHCO Aviance, gathered very useful information about the former workers of NAHCO, including a list of 936 former workers that were paid some amounts classified as gratuity benefit by BPE/NAHCO and computed based on an effective date of August 2005.

    “Considering that some amounts related to terminal benefits have been paid to the ex-workers by NAHCO/BPE, the amount paid by the Directorate is the net amount determined after deducting this earlier payment. Whatever is payable as outstanding net amount to NAHCO ex-staff is, therefore, a function of the amount earlier paid to them. In view of this, the Directorate does not make any deduction from the amount computed and determined as the outstanding net benefits due to each ex-worker of NAHCO.

    “Similarly, the computation of the severance benefits of the ex-workers is based on their career records covering the date of first appointment, and not date of conversion, date or details of last promotion and date of disengagement. The severance payments being made to ex-workers of NAHCO has been determined based on the provisions in the NAHCO conditions of service that was in force at the time of their disengagement, and related provisions of the Public Service Rule. The entitlements cover gratuity based on qualifying criteria in addition to domestic allowance for managers; repatriation allowance; disengagement allowance; one month in lieu of notice; and annual leave allowance.”

    The PTAD boss also said the severance benefits being computed and paid to former NAHCO workers is a one-off final payment.

  • Guinea grows investment income by 50.5%

    Guinea grows investment income by 50.5%

    By Omobola Tolu-Kusimo

     

    Guinea Insurance Plc’s investment income grew by 50.5 per cent, from N139 million in 2018 to N210 million in the 2019 financial year end.

    Operational expenses of N868.6 million were also managed as it resulted in a savings of about three per cent compared to N904 million reported the previous year.

    The company’s Gross Premium Written  increased from N1.24 billion in 2018 to N1.29 billion last year, an increase of 4.02 per cent.

    Also, the Gross Premium Income decreased by 2.05 per cent from N1.20 billion in 2018 to N1.17 billion last year.

    Net Premium Income decreased slightly by 0.27 per cent from N904.9 million in 2018 to N902.4 million last year.

    The Chairman, Godson Ugochukwu, spoke while presenting the 2019 Financial Year results to its shareholders at the company’s 62nd Annual General Meeting (AGM).

    He said the dip in the economy was responsible for the declining revenue of insurance firms.

    It stated that premium payments for the year decreased significantly as in most cases, policies were not renewed for want of disposable income, among other economic challenges.

    On steps taken by the company to meet the recapitalisation of the National Insurance Commission (NAICOM)and beat the December 31, 2020 and September 30, 2021 deadlines, Ugochukwu said the company is set to surpass the requirements of the regulatory authorities.

    He said: “We are sure not to be left behind; discussions are ongoing and our preparedness has reached an advanced stage but could not be discussed prematurely.

    “We are also looking at the way of merger and the company is in discussion with core investors.’’

  • Linkage Assurance profit hits 894%

    Linkage Assurance profit hits 894%

    By Omobola Tolu-Kusimo

     

    Linkage Assurance Plc has recorded a Profit Before Tax (PBT) of N1.34 billion in 2019, about 894 percent increase over the N134.70 million it made in 2018.

    The company posted a Gross Premium Written (GPW) of N6.52 billion. In 2018, it was N5.39 billion, a 21 percent increase.

    The company rewarded its shareholders with a bonus issue of one for four shares by the capitalisation of N1 billion from the company’s general reserve account.

    Chairman of the company, Chief Joshua Fumudoh, who spoke during its 26th Annual General Meeting (AGM), said despite the difficult operating environment, Linkage made appreciable progress.

    He said the company made a profit of N409 million in 2019, compared to the N772 million losses in 2018, while net claims paid was N1.7 billion compared to the N2.7 billion of the previous year.

    He said the significant reduction in net claims was as a result of improved underwriting and effective reinsurance arrangement.

    The Managing Director of the company, Mr. Boniface Okezie, added that the company, during the year under review, crafted a Five-Year Strategic Road Map that would guide its operations in achieving her short-and long-term goals.

    The four strategic pillars in line with its Balanced Scorecard Framework, Daniel Braie noted, include Business Growth, Financial Excellence, Operational Excellence and Customer Intimacy

    Shareholders, who attended the meeting, who included the National Coordinator, Independent Shareholders Association of Nigeria, Sir Sunny Nwosu; Chairman, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie; Mrs. Bisi Bakare and Mr. Nona Awoh, applauded the board and management for a good performance.

    They appreciated the bonus issue, describing it as a ‘palliative’ to shareholders, expressing optimism that Linkage is well-positioned to pay better dividends in future.

     

  • PenCom, PFA appeal judgment on 50 per cent lump sum

    PenCom, PFA appeal judgment on 50 per cent lump sum

    By Omobola Tolu-Kusimo

     

    The National Pension Commission (PenCom) and ARM Pension Managers have appealed against the judgment that legitimitises 50 per cent lump sum for retirees.

    An senior officer in the pension industry, who spoke on condition of anonymity, said the Commission has also obtained a stay of execution on the judgment.

    The appeal and stay of execution order are coming on the heels of a judgment by Justice Oyebiola Oyewumi of the National Industrial Court (NIC), Abuja Judicial Division in the case a 63-year-old retiree, Mr. Maroof Giwa v. ARM Pension Managers and the National Pensions Commission.

    Giwa sought the order of the court to claim 50 per cent lump sum from his pension as against the 25 per cent stipulated by the Pension Reform Act (PRA), 2014, which pension managers pay.

    The retiree claimed that the computation of the lump sum/benefits by the defendant done on the 25 per cent was illegal.

    He argued that he could not be treated like a retiree as he quit service voluntarily and that he’s above 60 and would want to withdraw 50 per cent or 75 per cent of his pension.

    Delivering her judgment, Justice Oyewunmi granted Giwa’s prayer.

    She said the norm should  be broken for Giwa, considering his age, and the life expectancy of male Nigerians as projected by World Health Organisation (WHO).

    She held that 25 percent lump sum calculated by the Arm Pension Managers was unlawful.

    She said the 25 percent withdrawal stated in the Pension Reform Act is for a retiree who retired at 50. The provision, she said, does not apply to Giwa.

    However, Arm Pension Managers, argued that the claimant had no case.

    Its counsel, M. Abdulraheem, submitted that the PenCom only guarantees a 25 per cent lump sum.

    He submitted that to allow the claimant argument would amount to tinkering with an Act of the National Assembly and that it would  enable not only the claimant but also other RSA holders determine what should be paid to them.

    He said doing so would amount to usurping the powers of the second defendant as stipulated by law that the withdrawal of lump sum is an option predicated on the condition that the residue in the RSA would be sufficient to procure funds withdrawals or annuity.

    Also, PenCom counsel E. O. Awa argued that the Act did not provide for a lump sum of 50 per cent, 65 per cent, 75 per cent or 25 per cent except 25 per cent for an employee who retires before 50 or disengages from employment.

    But Justice Oyewumi held that  60 years and above was not in the spirit of Section 7(2) of the Act that specifically made provision for a 50-year-old retiree to withdraw 25 per cent lump sum.

    Some observers have, however, said the judgment took advantage of what seems like ambiguity in the law, citing Section 173 of the Constitution, Section 7(1) and (2) as not stating that it applies to retirees who are over 50.

    Some experts, however, disagreed, stating that there was no ambiguity.

    A chief executive officer, who spoke on the condition of anonymity, said: “While some retirees want 50 per cent, 75 per cent or all their pension to be given to them at a go, others believe the 25 per cent is okay as it will allow them to receive monthly or quarterly pension, which is like salary.

    “In any case, it is best to leave the matter to the courts to decide and interpret the law. Ultimately, PenCom approves percentage payouts as they are empowered to by law. We all want immediate gratification which is human nature. And it is more pronounced in a country with very little saving culture. This attitude to savings is further exacerbated by our vey challenging economy. We need to continue to dialogue and hopefully find a middle ground that works most. Pension operators need to lead a campaign to sensitise the public on the objectives of the PRA, such that the stakeholders will see that it was created in their interest,” he added.

  • World’s largest pension fund loses $165b in worst quarter

    World’s largest pension fund loses $165b in worst quarter

    By Omobola Tolu-Kusimo

     

    The world’s biggest pension fund posted a record loss in the first three months in the year after the coronavirus pandemic sparked a global market rout in the period, The Economic Times has reported.

    Japan’s Government Pension Investment Fund lost 11 per cent, or 17.7 trillion yen ($164.7 billion), in the three months ended March, it said in Tokyo on Friday. The decline in value was the steepest based on comparable data back to April 2008, reducing the fund’s total assets to 150.63 trillion yen. Foreign stocks were the worst performing investment, followed by domestic equities

    The results come just months after the fund revamped top management and revised its asset allocation to focus more on overseas debt. The loss, which wiped out gains for the fiscal year, may attract political attention as social security remains a major concern for tens of millions of Japan’s retirees.

    “The decline in domestic and foreign equities led to a negative return for the fiscal year,” said Masataka Miyazono, the president of GPIF.

    Read Also: Pension fund hits N11.09tr

     

    ‘’Both equity markets performed strongly during 2019 even under pressures from the U.S.-China trade negotiations.

    “The global coronavirus pandemic led to investors taking a risk-off stance.”

    Overseas bonds were the only major asset to generate a positive quarterly return. The securities gained 0.5 per cent, compared with losses of 0.5 per cent for domestic bonds, 18 per cent for local equities and 22 per cent for foreign stocks.

    In April, GPIF raised its asset allocation to foreign bonds by 10 percentage points to 25 per cent, while keeping the target for foreign and domestic stocks unchanged at 25 per cent.

    Naoki Fujiwara, the chief fund manager at Shinkin Asset Management Co., said the losses were expected. Equities have rebounded since March, so the pension fund should be recouping losses for the April-June period, Fujiwara said.

  • AXA Mansard Health introduces new initiatives

    AXA Mansard Health introduces new initiatives

    By Omobola Tolu-Kusimo

     

    AXA Mansard Health Limited has unveiled initiatives to better its customers amid the COVID-19 pandemic, the Head of Preventive Health and Wellness of the company, Dr Edeigbini Omokhudu has said.

    In a statement, he said the initiatives cut across drug pickups, health talks and webinar series for the corporate customers.

    According to him, with over 75 pharmacies partners across Nigeria, the AXA Mansard Health initiative is aimed at making medication accessible to the enrolees and limit exposure to the  virus.

    He stated that enrolees with chronic illnesses could pick up their medications monthly from the pharmacy instead of going to the hospitals for refills.

    Read Also: AXA Mansard offers free motor cover

     

    He said: “After talking to a doctor on our telemedicine app, they can also pick up medications prescribed; the enrolee can walk into any of our partners with a prescription and enrolee card to be attended to.

    ‘’The company went virtual on their series and health talks with topics springing from mental wellness, COVID-19, sedentary lifestyle, hypertension, and hepatitis being slated for later this week.

    “With 99 per cent engagement with our customers, these topics were uniquely selected based on: data from the claims pool per organisation where we suggest what topics will be most pertinent to their staff, their choice based on their own internal processes where we offer them a list of topics from the pool and then they pick based on their own decision making process,” he added.

     

  • CHI records 100% right issue subscription

    CHI records 100% right issue subscription

    By Omobola Tolu-Kusimo

     

    The recent rights issue embarked upon by Consolidated Hallmark Insurance (CHI) Plc was fully taken up by its shareholders, the Group Managing Director/Chief Executive Officer (CEO) of CHI Plc, Mr. Eddie Efekoha has said.

    Efekoha, who made this known in a statement, said the company offered  rights issue of 2,032,500,000 ordinary shares of 50 kobo each at 52 kobo per share.

    According to him, the result of the offer which closed on June 8, and has just been approved by the Securities and Exchange Commission (SEC,shows a 100 per cent subscription.

    He stated that the success recorded by the company in spite of the prevailing tough economic environment from the COVID-19 pandemic is a demonstration of high confidence of the shareholders in the company.

    He said: “Details of the basis of allotment as approved by the Securities Exchange Commission (SEC) shows that 99 shareholders who were provisionally allotted 681,465,926 ordinary shares accepted their rights in full and were fully allotted accordingly.

    Read Also: Power sector records new all-time peak of 5,420.30mw

     

    ‘’Additionally, out of those that accepted their rights in full, 68 shareholders applied for additional shares totaling 1,289,699,021 ordinary shares and were allotted 1,289,699,021 from the renounced rights, making the offer 100 per cent allotted.

    “The successful outcome of this rights issue is a significant boost to the company’s quest to meet the new capital regime announced by the National Insurance Commission (NAICOM).

    ‘’The new minimum capital requirement to operate as a General Insurance Business in Nigeria was raised from N3billion to N5billion by end of 31, December 2020 and to further increase to N10 billion by 30 September 2021.”

    Efekoha expressed delight at the result.

    ‘’It is great to see investors’ confidence and trust in our company being exhibited with the full subscription of the rights offer, with several shareholders taking up their rights fully and applying for additional units at a time when investors’appetite is dampened due to the ravaging pandemic,’’ he added.