The Nation Newspaper

Category: Pension

  • Sharia pension fund coming

    Sharia pension fund coming

    By Omobola Tolu-Kusimo

     

    A new pension fund, Sharia Fund  may birth soon, The Nation has learnt.

    The Sharia Fund which will be Fund 6 under the Multi-Fund structure is coming after Fund 5, the Micro Pension Scheme, will be a sharia compliant fund.

    Multi-Fund structure is a framework designed to match age and risk profile to one of four distinct Retirement Savings Account (RSA) funds.

    These include three RSA Fund types for active contributors and one Retiree Fund for retired contributors. Membership of funds one to three is restricted to contributors in the formal sector only.

    Last year, the National Pension Commission (PenCom) introduced the Micro Pension Scheme fund type.

    The Managing Director, ARM Pensions, Mr. Wale Odutola   said  the fund is similar to Islamic banking products in the banking industry and Takaful Insurance product in the insurance industry.

    Read Also:PenCom orders employers to submit workers’ insurance certificates

    Odutola who said it is a positive development for the industry stated that there are few Muslims that are particular about how they invest and what they invest their monies into.

    He said the investment channels have to be areas that are acceptable with their fate.

    Speaking further on investment of pension fund, he said the exposure to variable income instruments under the Multi-Fund structure is the sum of a Pension Fund Administrators (PFAs) investments in Ordinary Shares and participation units of Open Close-ended and Hybrid Funds; Real Estate Investment Trust; Infrastructure Funds; and Private Equity Funds comprising its current holdings and any future financial commitments to the acquisition of participation units in these Funds.

     

  • AIICO Pension: micro pension makes slow embrace

    AIICO Pension: micro pension makes slow embrace

    By Omobola Tolu-Kusimo

     

    Aiico Pension has said the micro pension scheme designed to capture people in the infromal sector has attracted the requisite attention.

    Its Managing Director, Eguarekhide Longe who spoke during the unveiling of a micro pension  product, Gift-a-Pension  in Lagos, said it has been difficult to find people take up the micro pension.

    This, he said prompted the company to look at the environment very carefully before  entering into the market with the product and then build on it.

    The product is designed primarily to enable people reward their personal and domestic workers by gifting them a Micro Pension Plan (MPP) and contributing on their behalf on a regular basis.

    MPP was launched by President Muhammadu Buhari in March last year to secure the future of the informal sector workers, a group of people that constitutes about 70 per cent of the working population in the country.

    He said the company has always looked for the unique product that could be given to its clients.

    He said the the firm chose  Valentine’s Day to unveil  the product, noting that it is a day  people give gifts to each other.

    He said: “The product is simply a pension product that allows people who have individuals that they hold dear and want to build their future for them decide to set up pension for them.

    It is a process that we expect that will have good anchorage because the individuals who set up the scheme in the first place are very knowledgeable of what pension can do for them and would gift it to people who are close to them.

    The product launch is signaling event to commence its sale and we will build up on the awareness that has been launched today.

    “We have looked at it all over the globe and we found that gift a pension process sets up a pension scheme for people who will primarily not set up pension for themselves. It is a very potent way of developing the informal sector pensions.”

    Head, Strategic Planning and Corporate Communications, Mr Olubankole Ekundayo added that micro pension is for people who do not work in the formal space.

    “With formal pension, the employer is responsible for the pension contribution but with micro pension, the account holder is responsible.

    We realised at AIICO Pension that it is not gaining the kind of traction it should gain so because a lot of people who we want key into it cannot really afford it.

    Read Also: EFCC re-arraigns six public officers over ‘N64.6b police pension fraud’

    Yes, pension is for everybody but the truth is that it is not cheap. It takes dedication, understanding and good disposable income.

    “We realise that a lot of people do not have extra disposable income to give for pension and so we came up with the initiative of gift a pension, where people who have a little extra can give that pension which is a gift of a lifetime to domestic staff. This product takes the burden off this people to their sponsors.

    “Also because we understand that sponsors usually have busy schedules, we have put in place a seamless process with a technology platform that would them to purchase the product from their mobile phones,” he said.

    The Director-General, Lagos State Pension Commission (LASPEC), Mrs Folashade Onanuga who was a special guest at the event believes micro pension is an attempt at ensuring that any Nigerian who reaches an advanced age has something to fall back on at retirement.

    “Yes, we have the Contributory Pension Scheme (CPS) for those in structured employment but there is no provision for artisans and other self-employed people. These people will need a means of sustenance at old age too.

    “Micro pension will help these category of people to plan for eventual old age and as people embrace it, we will get to a point where the country will have a provision for the elderly.

    “Gift a pension is good because if people work for you as housemaids, drivers, among others, as an employer, you should think of their welfare in old age. You can add value to their lives.

    “ We have found some employers send their housemaids to school and even travel abroad. This product is another way in which you can add value to your domestic and personal staff.”

    One of the company’s client, Peter Edorh lauded the company for coming up with the product, noting that it will widen the net of pension coverage.

    Edorh who said he will purchase the product for his domestic staff said this category of people have been neglected all this while.

    He also believes that despite economic challenge, people will buy it if they understand it.

  • Pension complaints and solutions

    Pension complaints and solutions

     

    SUNDAY: I retired in June 2003 from the service of former governmet agency now National Clearing and Forwarding Agency. I received my pension from March 2008 to April 2018. But they stopped my pension after April and I don’t know why. Please help me.

    PTAD: If Mr Eshiet has been verified, we advise that he send a clearly scanned copy of his verification slip to complaints@ptad.gov.ng. If he has not been verified, he can visit our Abuja or Lagos office with his employment documents, BVN and original stamped bank statement from April 2018 till date to be verified and monthly pension payment resumed if eligible.

    BENJAMIN: I am Benjamin, I retired in 2006 under the old NEPA/PHCN and by transition from NELMCO to PTAD. My monthly pension of January and March 2015 were omitted. I went to PTAD five times and did all what I was told to do but to my surprise, each time I went there, they would tell me ‘no fund’ Please intervene for me.

    PTAD: The pensioner is required to submit his bank statement from July 2014 to date to PTAD Office Abuja including his complaint to enable us investigate and resolve his complaint.

    ISA: Good evening, Madam. This is from one of the Pre 1996 Railway pensioner in Nasarawa State. My name is Isa. Our 18-month arrears (part of 52 months) since the time of former President Goodluck Jonathan is yet to be cleared. Also, railway pensioners are the least paid nationwide.

    Kindly use your good office to help and solve our problems. We “Thank you” for been there for us.

    PTAD: It is an assumed liability by some group of pensioners in the NRC. The group is yet to forward any supporting documents.

    ALICE: My name is Alice. Thanks for The Nation’s concern on pensioner’s matters. I am a state pensioner with federal share. I retired on April 30, 2008 without payment till date. I did verification since August 2017, but PTAD has not paid me. Several pensioners have got their pension. Kindly assist.  Thank you.

    PTAD: The pensioner’s complaint has been investigated. She will receive payment as funds are allocated and released by the FG.

    JOHN:  My name is John, a retiree from Federal Polytecnic, Idah 2018. My PFA is Sigma. I did my biodata in July 17, 2017 and my last salary was in September 2018.

    I learnt that PenCom ensures that retirement benefits are paid as at when due.  Since then, does it mean pension is no longer paid as at when due? When should I expect my retirement benefits? And what are the kind of problem(s) that cause this long delay?

    Read Also: Pension complaints and solutions

     

    PENCOM: He needs to forward his enrolment slip to enable the commission access his records.

    FOLOWOSELE: My name is Folowosele. I retired as a civil servant. Please what document do I submit to PENCOM to process my pension?

    PENCOM: He needs to contact the Pension Desk Officer (PDO) of his MDA to get the necessary documents for enrolment. He is required to come along with the PDO to the enrolment center for his/her attestation.

     

    ASUQUO: I am Asuquo from Akwa Ibom State. Please what are the rules and regulations of payment for Federal Government retirees? Secondly, I retired in April, last year. When will my accrued right be paid?

    PENCOM: The rules and regulation for payment of Federal Government retirement benefits under the CPS starts by participating in the commission’s pre-retirement verification and enrolment. The prospective retiree/retiree needs to contact the Pension Desk Officer (PDO) of his/her MDA to get the documents for enrolment.

    He/she is also required to come along with the PDO to the enrolment center for his/her attestation. After the enrolment, the retirement benefits are determined and paid into the RSA of the retiree based on the information provided by the retiree during enrolment. But please note that retirement benefits are paid subject to release of funds by the Federal Government for payment of accrued rights.

    ADIGUN: My name is Adigun and my PFA is First Guarantee.  The issue I want to discuss affects contributory pensioners who were Osun State Government employees that retired in 2016 to date. None of these sets have received either gratuity or pension since they retired. The real problem we are having is not known as we were being fed with lies by various concerned PFAs from time to time.

    Kindly advise us on the way out of this predicament.

    PENCOM: The relevant Department would require the PIN of the complainant to assist them further.

     

     

  • Group threatens showdown with govt over pension funds

    By Omobola Tolu-Kusimo

    The intention of the Federal Government to borrow N 2 trillion from the N10 trillion accumulated pension fund is incorrect as the fund cannot be borrowed by law, a pension expert, Ivor Takor has said.

    Takor, who is the Director, Centre for Pension Right Advocacy, made this known in a submission by advocacy group on alleging that the Federal Government intend to borrow the huge cash from pension fund to develop infrastructure.

    He stated that pension fund is about investment and not borrowing, adding that Pension Fund Administrators (PFAs) are investing organisations and not borrowing organisations.

    He maintained that the N10 trillion Fund is not warehoused in any account of the National Pension Commission (PenCom), the Central Bank of Nigeria (CBN), the PFAs or Pension Fund Custodians.

    The fund, he said, is warehoused in the private individual Retirement Savings Accounts (RSAs) of contributors, who are workers cum beneficiaries.

    He said part of the centre’s submission is that the Contributory Pension Scheme (CPS) has created a huge pool of long term investable fund, which should be utilised for infrastructural development but it should be done within an agreed framework put in place by all critical stakeholders.

    Read Also: Pension or perish

    He said: “The funds are invested by the Pension Fund Administrators on behalf of the workers, based on guidelines issued by the regulator. The investment is carried out with two principal objectives, which are adequate return on investment and the safety of the fund.

    “Our position at the Centre for Pension Rights Advocacy on the matter is that as at January 21, 2020, pension fund assets under the CPS had risen to N10 trillion. This is a very good development for an industry that on its take off in June 2004, had a federal public sector pension liability. Pension funds in nature contribute to a nations huge pool of long term investable fund. Therefore, it should not come as a surprise to anyone that the huge pension fund assets in the country will attract the attention of the Federal Government for infrastructural development.

    “The N10 trillion pension fund is not warehoused in any account of PenCom, the Central Bank of Nigeria, the Pension Fund Administrators or the Pension Fund Custodians. The fund is warehoused in the private individual Retirement Savings Accounts of contributors, who are workers cum beneficiaries. The funds are invested by the Pension Fund Administrators on behalf of the workers, based on guidelines issued by the regulator. The investment is carried out with two principal objectives, which are adequate return on investment and the safety of the fund.

    “Therefore, we are stating categorically without any fear of contradiction, that pension fund is about investment and not borrowing. PFAs are investing organisations and not borrowing organisations. The spirit and letters of the Pension Reform Act 2014 envisage investment of pension fund and not borrowing of the fund. The government, PenCom and Pension Operators know this very well. We are aware that a committee is  studying and working out modalities of how a huge sum of pension fund can be invested in infrastructure.”

    He said the centre sees this as a good development because the law and guidelines for investment of pension fund, makes provision for investment in infrastructure.

    “However, we want to believe and advise that critical stakeholders in the industry, especially workers who are the owners of the fund are being carried along through their representatives, the industrial Unions and the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC). It should be noted that their understanding and buy in, in such huge investment is extremely important. There is a popular maxim that you cannot shave the hair of a person, in his/her absence. PFAs who are businesses have the interest of their shareholders first and other person or individuals are secondary while trade unions have the interest and welfare of their members as their principal objective. It is for that reason that they are established.

    “We want to point out that RSAs of workers are not guaranteed by the federal and state governments nor any other organisation for that matter. The accounts and the funds in them are open to operation and investment risk, which is borne by the owners of the accounts. Therefore, their representatives must have a say on any critical decision on the contents of the accounts.

    “The law doesn’t confer on the Federal or state governments, the power to decree or order how the funds in private individuals Retirement Account should be invested. They can negotiate the terms and conditions under which they are ready to do business with those who have legal ownership and power to invest the fund.

    “We conclude by submitting that the CPS has created a huge pool of long term investable fund, which should be utilised for infrastructural development. This should be done within an agreed framework put in place by all critical stakeholders,” he added.

  • PTAD, ICPC partner to fight scammers

    By Omobola Tolu-Kusimo

    The Pension Transitional Arrangement Directorate’s (PTAD’s) fight against pension fraudsters and scammers has received a boost with collaboration with the Independent Corrupt Practices and Other related Offences Commission (ICPC).

    PTAD Executive Secretary, Dr. Chioma Ejikeme, said the boost was coming following assurances from the ICPC.

    According to her, the ICPC has promised to strengthen its collaboration with PTAD to stifle the activities of pension scammers.

    She stated that the Directorate had paid a courtesy visit to the ICPC Chairman, Prof Bolaji Owasanoye, in his office in Abuja to inform him of the efforts put in place by the Directorate.

    Read Also: NOA, ICPC partner to fight corruption in constituency projects

    She noted that the Directorate has been working hard to fight scammers and it is yielding positive results.

    She also lauded the chairman for the agency’s continued support particularly during the just concluded parastatals pensioner’s verification exercise.

    She said the two agencies agreed to continue to share information especially with regards to court processes and arraignment of pension fraudsters and scammers.

    This will among other things, ensure tabs are kept on criminal activities and ensure more convictions, she added.

    Owasanoye commended Dr. Ejikeme and her team for the good job at PTAD.

    He also reaffirmed the anti-graft agency’s determ ination to continue to collaborate with PTAD to achieve success in the fight against the pension criminals.

  • Pension complaints and solutions

    E-mail: omobola_m@yahoo.com. Phone no. 08117340360

    SHAGIDIGBI: I am Ashagidigbi, a pensioner. I have not received my September 2019 pay. Kindly investigate the problem with Polaris Bank. All other banks have credited their pensioners. This happened last month. Are they going distressed? Please do something.

    PTAD: Several phone calls were made to the pensioner without success.The pensioner is required to send hard copies of his BVN, Verification acknowledgement slip and bank statement from July 2019 to date (stamped and signed).

    FILANI: My name is Filani, a federal pensioner. I use Polaris Bank. My September 2019 pension is yet to be paid, a week after those using other banks have got theirs.

    PTAD: Several phone calls were made to the pensioner without sucess. The pensioner is required to send hard copies of his BVN, Verification acknowledgement slip and bank statement from July 2019 to date (stamped and signed).

    ODUSHOLU: I am Odusholu. I served and retired at Federal Ministry of Transport, Lagos on level 06 in 1977. Up till now my pension is N8115.67. The national minimum wage had been increased thrice after I retired. The last was N18,000 and the new minimum wage is N30,000. Kindly help me through PTAD to correct the mistakes.

    PTAD: The pensioner was contacted and advised to provide a copy of his pensioner’s verification acknowledgement slip to enable the department review his complaint.

    FATAI: I retired from the Nigeria Customs Service in December 2003. My complaint is the stoppage of my monthly pension from January 2016 to date. I have made many trips to Abuja over this problem. The latest one was on Tuesday, June 21, 2019. I made another trip to PTAD Abuja on their invitation earlier extended to me on Monday, June 13, 2019 through one of their officials to come to PTAD Abuja to sort out the matter.

    PTAD officials sorted out my file. They requested and collected my details, such as retirement letter, appointment letter, account number, statement of account from January 2016 to May 2019, among others. But up till now, I have not heard anything from PTAD. Please help me, I am in penury and dying.

    PTAD: The pensioner is to provide a copy of his pensioner’s verification acknowledgement slip and bank statement from January 2016 to date (stamped and signed) to enable us investigate his complaint.

    ADIGUN: My name is Adigun and my PFA is First Guarantee.  The issue I want to discuss affects all contributory pensioners who were Osun State Government employees that retired in 2016 to date. None of these sets have received either gratuity or pension since they retired. The real problem we are having is not known as we were being fed with lies by various concerned PFAs from time to time. Kindly deal into this and advise us on the way out of this predicament.

    PENCOM: The relevant Department would require the PIN of the complainant to assist them further.

    BENJAMIN: I am Benjamin. I retired in 2006 under the old NEPA/PHCN and by transition from NELMCO to PTAD. My monthly pension of January and March 2015 were omitted. I went to PTAD five times and did all what I was told to do but to my surprise, each time I went there, they would tell me ‘no fund’ Please intervene for me.

    PTAD: The pensioner is required to submit his bank statement from July 2014 to date to PTAD Office Abuja, including his complaint to enable us investigate and resolve his complaint.

    ISA: Good evening, Madam.

    This is from one of the pre-1996 Railway pensioner in Nasarawa State. My name is Isa. Our 18 -month arrears (part of 52 months) since the administration of former President Goodluck Jonathan are yet to be cleared. Also, Railway pensioners are the least paid nationwide. Kindly use your good offices to help to solve our problems. We thank you for being there for us.

    PTAD: It is an assumed liability by a group of pensioners in the NRC. The group is yet to forward any supporting documents.

    ALICE: My name is Alice. Well-done The Nation for your concern for pensioners. I did verification since August 2017 but PTAD has not paid me till date.

    Several pensioners have got their pension. I am a state pensioner with federal share. I retired on April 30, 2008 without payment till date. Kindly assist. Thank you.

    PTAD: The pensioner’s complaint has been investigated. She will receive payment as funds are allocated and released by the Federal Government.

    ASUQUO: I am Asuquo from Akwa Ibom State. Please, what are the rules and regulations of payment for Federal Government retirees? Secondly, I retired in April, this year when will my accrued right be paid?

    PENCOM: The rules and regulation for payment of Federal Government’s retirement benefits under the CPS starts by participating in the Commission’s pre-retirement verification and enrolment. The prospective retiree/retiree needs to contact the Pension Desk Officer (PDO) of his/her MDA to get the documents for enrolment.

    He/she is also required to come along with the PDO to the enrolment centre for his/her attestation. After the enrolment, the retirement benefits are determined and paid into the RSA of the retiree based on the information provided by the retiree during enrolment. But please note that retirement benefits are paid subject to release of funds by the Federal Government for payment of accrued rights.

  • Stanbic Pension, ARM emerge top 5 PFAs

    As the industry grows and as the addition of a new product and opening of transfer window draw near, among other development, stakeholders within and outside the industry believe the time to know the status and ranking of each PFA is now. In this report, Omobola Tolu-Kusimo reveals the top five and bottom five PFAs.

     

    The ranking of Pension Fund Administrators (PFAs) have been done behind closed doors since the commencement of the Contributory Pension Scheme (CPS) by the regulator, the National Pension Commission (PenCom) and pension managers, the PFAs.

    Findings show that the reason it’s been done privately is because of the fragile nature of the pension fund and industry. The regulator, it was learnt, also fears unhealthy competition among operators.

    But as the industry grows with addition of new product like micro pension and the transfer window that would enable contributors to move their pension account from one PFA to another, among other developments, it appears that it will no longer be ‘business as usual’.

    Stakeholders within and outside the industry believe the time to know the status of each PFA is now.

     

    The Nation Findings

    Investigation by The Nation shows that the top three PFAs, going by the Retirement Savings Account (RSA) or pension contributors count under their management, are Stanbic IBTC Pension Managers with 1,718,352 contributors, Arm Pension Managers 743,728 contributors; and Trustfund 717,112.

    Stanbic has the largest market share of 29.5 per cent ARM and Trustfund has 10.1 per cent market share each.

    This was shown in an industry report on membership as at December 2018.

    In the report, Sigma Pension has 698,227 contributors while Premium Pension has 658,227, forming the top 5. They both have eight per cent and 7.6 per cent market share respectively.

    However, Leadway Pensure is sixth PFA with 584,702 contributors and 5.2 per cent market share, FCMB Pension is seventh with 405,998 contributors and 4.3 per cent share; Pensions Alliance is eight with 523,432 contributors and four per cent share and 3.5 share; while Nigeria Police PFA Ltd is tenth with 269,479 and 2.7 per cent share.

    Meanwhile, the PFAs that form the bottom 10 are Investment One Pension with 74,966 contributors and 0.6 market share; Apt Pension 127,871 with 1.2 per cent share; Veritas Pensions 132,394 contributors with 1.3 per cent share; Fidelity Pensions 229,358 and 1.4 per cent share; NLPC Pension with 302,829 and 1.4 per cent share; and Oak Pensions with 197,140 contributors and 1.5 per cent share.

    Besides, the total number of contributors in the period under review are 8,417,234.

     

    PenCom ranking report

    Before now, the regulator only expose rankings to the public without disclosing the companies’ identities.

    In PenCom’s most recent quarter report, “Second Quarter Summary Report 2019”, the commission stated that the total pension contributions stood at N9.3 trillion as at July, 2019. As at the last report on the fund in December 2019, total pension fund has grown to N10.22 trillion.

    In a part of the summary report titled: “Ranking of PFAs by the Amount of Contributions Received”, the commission said the ranking of PFAs by total pension contributions received into the pension fund indicates that the top 5 ranked PFAs received 65.97 percent of the total contributions as at the end of the second quarter of 2019.

    The commission further disclosed that the top 10 ranked PFAs accounted for 88.08 percent of the total contributions.

    The bottom five and 10 PFAs on the other hand received N105.11 billion and N518.33 billion pension contributions, representing 1.84 percent and 9.06 percent of the total contributions as at the end of the quarter under review.

    In another part titled, “Ranking of PFAs by Asset Size as at June, 2019”, PenCom stated that “A review of PFAs’ ranking by size of assets under their management showed that the top three and five PFAs accounted for more than half of the total RSA assets at 54.07 and 66.77 percent.

    “The top 10 PFAs had 87.76 percent of the total RSA assets under their management while the bottom ten PFAs accounted for 9.22 percent of the RSA assets under management at the end of the reporting period.”

    The Commission further stated that the ranking of PFAs by number of registered contributors showed a redistribution of the market share across the various groups.

    During the quarter, the market shares of the bottom three, five and ten PFAs slightly declined due to transfers to the newly licensed Nigerian University Pension Management Company (NUPEMCO) PFA.

    “The market shares of the top three, five and ten also slightly dipped as at end of the quarter under review. The shares of the bottom five and ten PFAs decreased from 5.34 and 18.07 percent in the first quarter of 2019 to 3.88 and 14.98 percent respectively as at the end of the reporting period.

    Similarly, the market shares of top five and ten PFAs dropped from 53.57 and 78.81 percent in the previous quarter to 53.41 and 78.59 percent respectively as at the end of second quarter.

    “Similarly, the share of the top three PFAs had reduced from 37.64 percent as at first quarter, 2019 to 37.60 percent as at second quarter, 2019.

    The share of the bottom three PFAs decreased from 2.33 percent to 1.46 percent during the same period.  Also, 14 of the PFAs with 66.67 percent share had each registered less than 500,000 RSAs while the remaining seven PFAs with 33.33 percent share had registered more than 500,000 RSAs each.

     

    What you need to know

     about PFAs

    There are 22 licensed PFAs in the country. The CPS requires pension funds to be privately managed exclusively by licensed PFA.

    The main functions of the PFA are to open Retirement Savings Account (RSA) for employees; invest and manage pension fund assets; payment of retirement benefits and accounting for all transactions relating to the pension funds under their management.

    PenCom considers applications for license to operate as a PFA from entities that fulfil the requirements as enshrined in Section 60 of the PRA 2014.

    Prior to the issuance of an operating license, the PFA must be a limited liability company whose sole object is the management of pension fund assets. The PFA must also satisfy the Commission that it has the professional capacity to manage pension funds and administer retirement benefits.

    Read Also: Pension reforms: Edo to screen batches 58 to 65 for arrears’ payment

     

     

    Poor services

    Some PFAs render poor service to clients. They have poor website, are not responsive to client’s complaints, do not pay benefits on time, do not send statements of accounts and other necessary notifications to their clients, among others

    A major stakeholder who spoke on condition of anonymity said the commission need to get tougher with erring operators.

    He said some PFAs deliberately hold back on information they should pass across to contributors and retirees, citing update on market fund price as one of the major information they withhold.

    He stated that this is worrisome to some other PFAs who are following the regulatory assessment requirement which mandates you to update your website every day, noting that by so doing, all PFAs are updated with the market information.

    He said: “There is a circular by PenCom which states that all PFAs must update their website every day. But there are some PFAs who withhold information.

    For instance, if their market fund price is going down and they are losing money, they will just keep quiet and not update their fund price. But when it is going up, they will make all the noise. This is not how it is supposed to be.

    “The regulator also has a template of what is expected to be on PFAs website daily. It states what you must provide in term of content but a lot of PFAs don’t do it.

    The regulator should make them to do the right thing. Some PFAs also do not pay benefits on time, do not send statements of accounts and other necessary notifications to their clients.”

    Another pension operator, on his part, said ranking is by market share, which does not necessarily translate to good return.

    “A company with a small RSA count can make better returns than most those with the high count. This is because with less funds you have less exposure to some instruments. For instance, if we have to buy shares we buy profitable shares and not too much of it,” he added.

     

    Knowing a good PFA

    As a worker either as civil servant or private sector employee, the Pension Reform Act (PRA) 2004, repealed by PRA 2014, mandates that you set aside certain sum called pension which you will fall back upon when you retire, hence the need to save your funds with a good PFA that will make available your money when you retire.

    Although PenCom is working with all the PFAs to ensure the funds are safe and the company comply with the regulations as laid out in the Act, there is need for contributors to know PFAs that offer the best Return on Investment (ROI) and best customer service, especially as the commission prepares to open the transfer window.

    An operator who also spoke under the condition of anonymity said the most important thing is the performance of the funds that the PFA manages, particularly in terms of ROI.

    “The easiest way to do that is to look at the price that the PFA publishes, so you can take the price at two points in time to determine the rate.

    The reason I say this is that the way the industry has been set up, you can actually separate the profitability of the fund manager as a company, from the performance of the company as a fund manager.

    “If you want to look at performance of the company, it’s the same way you will look at any other company, profit and loss, you may want to have an idea of how efficient they are, look at return on equity and you can compare with competitors in the same industry.

    “The other thing you can do is look at how much of their income is from the whole business of funding. So, you want to look at the split between management fees and investment income,” he said.

     

    The future pension

    industry landscape

    According to pricewaterhousecoopers, the introduction of a multi-fund structure regime allowing the investment of pension funds based on contributor’s risk and age profile are will shape the future of the pension industry.

    Pricewaterhousecoopers in a report also said the opening of the transfer window allowing contributors to move their RSA accounts between PFAs and the introduction of biometric technology to register contributors and update current records will play significant roles.

    The report read: “Other developments are the creation of shared service centres to handle back office operations; Introduction of a multi-pillar pension scheme which would include the mandatory CPS, supplementary industry-wide pension schemes, voluntary pension schemes and additional corporate pension schemes for independent professionals such as medical specialists; Fierce competition with brand quality, innovation and quality service delivery being critical for the survival of most PFAs.

    “Mergers and acquisitions with many foreign players seeking to invest in the industry; The development of guidelines by the regulator on the creation of the Pension Protection Fund which would either adopt or create a Pension Protection Fund Manager ; Introduction of a social welfare element in the current pension regime; Trade unions clamouring for pension contributor protection laws; Advent of personalised pension advisory services, a precursor of Defined Ambition  Pension Schemes; and Retirement savings used as equity for mortgages will all shape the industry,” the report stated.

     

     

  • FAQ on Governance and Integrity of the New Pension Scheme

    By Omobola Tolu-Kusimo

     

    How can I be sure that my contributions are safe?

    All those managing or keeping custody of pension funds and assets will be licensed, regulated and supervised by the National Pension Commission.

    What is the guarantee that the pension funds under the new scheme will be well-managed and not diverted for other purposes?

    The functions of the Pension Fund Administrator (PFA) and Custodian are clearly spelt out in the Pension Reform Act 2004. The Act provides adequate safeguards against the misuse of the pension funds and assets by any operator.

    What happens if a PFA fails or is liquidated?

    The pension funds and assets in the Retirement Savings Account (RSA) are kept by the PFC and as such the liquidation of the PFA will not affect the funds and assets. Besides, every PFA is expected under the Pension Reform Act 2004 to maintain a statutory reserve fund as contingency fund to meet claims for […].

    Who can I complain to if I have a problem with a PFA?

    The Pension Reform Act 2004 allows any employee to complain about any PFA to the National Pension Commission.

    What is the role of the government in the new pension scheme?

    The Federal Government has established the National Pension Commission and charged it with the responsibility of regulating and supervising new pension scheme.

    Can the government take or use the money in my RSA for any purpose?

    The government cannot tamper with the pension funds in your RSA, because the Government cannot have access to the account. Besides, the Government is primarily concerned with ensuring the safety of the money in your RSA through the enforcement of strict rules and regulations.

    Read Also: El-Rufai raises minimum pension to N30,000

     

    Will inflation and devaluation of the naira not erode the value of the pension contributions?

    It is the duty of the PFAs to administer the contributions and invest in such a way that will ensure safe and reasonable returns on investment. The reserve fund created by the PFAs under the Act would compensate for any erosion of the value of the contributions.

    How is compulsory or voluntary retirement, especially in the Armed Forces to be handled under the new scheme, if this happens before 50 years?

    Under the Pension Reform Act 2004 a person can voluntarily retire or be compulsorily retired before the age of 50 years on the ground of medical advice, permanent disability or due to particular terms and conditions of employment. If any person retires under any of the foregoing circumstances, he is entitled to withdraw from his RSA.

    What is the minimum of pension guaranteed under the new scheme?

    The minimum pension guarantee shall be determined from time to time by the National Pension Commission.

    Is there adequate representation of all stakeholders on the board of the commission, or is it dominated by government appointees?

    There is adequate representation of relevant stakeholders in the Board of the National Pension Commission, which comprises of representatives of the Government, Nigeria Labour Congress, the Nigerian Union of Pensioners and the Nigerian Employers Consultative Association.

    Does the Pension Reform Act reflect the application of the principles of transparency and accountability?

    Yes. The new pension scheme entrenches the principles of transparency and accountability as reflected in the reporting requirement of the PFAs and PFCs to both the contributor and the National Pension Commission. An employee has the right to choose who manages his RSA and the right to receive statements of his account quarterly.

     

     

  • Lagos okays N I.92b to pay 444 retirees

    By Omobola Tolu-Kusimo

     

    Lagos State Government has  okayed N1.92 billion for the payment of accrued pension rights to 444 retirees of the Lagos State Public Service.

    The retirees were presented bond certificates that will enable them acess their money during the 71st batch Retirement Bond Certificates presentation held at the NECA Auditorium in Alausa, Lagos, according to a statement made by the Lagos State Pension Commission (LASPEC).

    LASPEC Director-General, Mrs Folashade Onanuga, reiterated that from inception of the Contributory Pension Scheme (CPS), the state government has been complying with the financial obligation demanded by the scheme, as it relates to monthly funding of Retirement Savings Account (RSA) of employee’s payment and death benefits to employees who die in service.

    She disclosed that some beneficiaries and amount involved were the biggest so far in the payment of accrued pension rights.

    She stated that Governor Babajide Sanwoolu’s administration is committed to retiree’s welfare and has demonstrated it with the pension bail of N13 billion approved in the  2020 budget.

    She said the governor had also increased the redemption funding rate from five per cent to 10 per cent of total emolument of workers.

    She expressed optimism that the monthly payment of entitlements to retirees would continue in Lagos State, such that the issue of retirees waiting for months before being paid would be a thing of the past.

    Read Also: Retirees advocate extension of workers’ retirement age

     

    She advised the retirees to be prudent and be aware of their health status so that they could live a healthy long life because there are various ailments that come with old age.

    She informed the beneficiaries that those of them above 60 would be enrolled for the health Insurance Scheme, the premium of which would be paid by the government.

    An official of the Lagos State Health Management Agency, Emeka Nwagunor further explained benefits to be enjoyed in the health scheme which will be obtainable in all general hospitals, private hospitals and all primary health care centers.

    He said they could enjoy 100 per cent health care on treatment of some health challenges, which covers certain categories of surgery and hernia, at government-owned health facilities, including general hospitals  as well as designated private hospital.

    He added that the scheme also covers, high blood pressure, arthritis, typhoid, malaria, x-ray for hand and legs.

    To cut fares, he urged the retirees to visit the nearest hospital.

    Many of the retirees expressed deep gratitude to the government, particularly Governor Sanwo-Olu for coming up with the various surprise benefits announced to them, which were declared to be first of its kind in Nigeria.

    Mrs Abike Olubamido, who spoke on behalf of other retirees, applauded the governor for having the interest of the retirees at heart. She commended LASPEC officials for their diligence.

     

     

     

  • Pension complaints and solutions

    Pension complaints and solutions

     

    MABAWONKU: My name is Mabawonku, a pensioner with federal share. I retired with NERDC in 1993 as assistant chief research officer. My gratuity and six months’arrears pension have not been paid after several correspondence and physical appearances to PTAD.

    I did verification with PENCOM in 2011 and PTAD in Lagos in last April.

    The Lagos State share has been paid where I retired in 2010 as a director.

    But for PTAD, promises that have not been fulfilled were given. Please help me.

     

    PTAD: The pensioner is to provide a copy of his pensioner’s verification acknowledgement slip to enable us investigate and follow up on his complaints.

    MRS. ADETUTU: You asked for my mother’s phone number, which I sent before July 17, last year. But there is a mistake in the write up. They wrote that she was given monthly pension between 2005 and 2010. She was not paid.

    Which is why sh e is asking for  the arrears.

    PTAD: The pensioner was contacted on her mobile phone number and informed to provide a copy of her pensioner’s verification acknowledgement slip through the complaintsemail (complaints@ptad.gov.ng). This will enable us investigate and follow up her complaint.

     

    OWOEYE: This is for someone very close to me. Please read this and any action taken will be appreciated:

    I retired as an Assistant Director of Education (GL 15) in December 1996, having served the government for 35 years. My gratuities were paid in 1998, when the value of the money had fallen more than 100 per cent. I started drawing my pensions in 2000. I am a federal pensioner, with no state share.

    Till date, I have not been allowed to enjoy any pension increases approved since 2000. In April 2009, my pensions were harmonised to enable me enjoy the 142 per cent increment approved in 2000.

    The voucher was prepared. This included the arrears accruing from  2000. That month, I was paid only the harmonised monthly amount. The arrears were not paid and have still not been paid.

    Later, this harmonised amount was reduced by 50 per cent for no reason. Despite series of verification and completion of complaints forms, no action has been taken on my case.

    However, the pension authorities keep on telling the public that they have been paying pension arrears and returning savings from discovery of ghost pensioners to government coffers.

    I submitted a letter of complaint to the Akure Office of the Public Complaints Office in April 2014, but I am not sure the letter left the office, although they charged me for courier.

    I retired from the Federal Civil Service at 56. I am 76 and I am still being denied my entitlements by fellow compatriots since  2000.

    This complaint and relevant documents, including my bank statement of accounts are in my records with PTAD, as were with those who handed over to them.

    Why is it that nobody is doing or saying anything about my case for 16 years? Does the younger generation of Nigerians who find themselves in critical positions in our public service, know that robbing old people of their entitlements or unconscionably delaying the releases of genuine claims for over a decade, they are incurring God’s wrath and judgments on themselves?

    It has been alleged that some highly placed managers of federal pensions have diverted billions of naira meant for vulnerable old retirees to personal accounts.

    Read Also: Pension complaints and solutions

     

    Must all these old people die without enjoying their benefits while those who are responsible for their plights continue to enjoy their loot with their families and friends?

    This administration that is committed to change and correcting previous ills, needs God-fearing people who are selfless, honest, public spirited and free from covetousness to administer pensions.

    I thank you, Omobola, for your interest in the welfare of the elderly.

     

    PTAD: The pensioner is to provide a copy of his verification acknowledgement slip so that proper investigation and follow up can be done on his complaint.

     

    MAKAMA: Dear Omobola, my name is Makama, a retiree from NARICT, Zaria with a pension verification number.

    My complaint is the non-payment of my last November pension salary and 33 per cent arrears which was recently paid.

    I kindly request for your intervention for the release of the above- mentioned cash.

     

    PTAD: The pensioner is to provide a copy of his pensioner’s verification acknowledgement slip, BVN and bank statement from last October. This will enable us do a proper investigations and follow up on his complaints.

     

    ZAKARI: I am Zakari from Niger State, the next-of-kin with an account number who is still begging you and your organisation to reintroduce my case to PTAD management for their inability to pay my father’s death benefit since my verification in October 2017.

    They were able to pay NITEL staff and 500 next-of-kin who had their verification in February 2018, three months after our verification.

    Please, you and your organisation are the last hope of the common man in this country. You are also the saviour of the common man when it comes to pension matter in this country.

    Please help me through this hardship. It is unbearable.

     

    PTAD: The NOK is advised to be patient because CSPD is working to resolve the complaints and pay all qualified NOK.

    However, he is advised to provide a copy of his verification acknowledgement slip to enable us follow up his complaint.

    Emmanuel: I am a state pensioner with federal share. My documents were scanned last August 14. My complaint is the non-payment since December 2006 at N12,927.70 for  monthly. Total arrears unpaid is N471,025.40

     

    PTAD: The pensioner is to provide a copy of his verification acknowledgement slip and bank statement from 2000 (When he retired) to date so that a proper investigation and follow up can be done.