The Nation Newspaper

Category: Pension

  • PenCom queries two PFAs

    PenCom queries two PFAs

    Two Pension Fund Administrators (PFAs) have been investigated by the regulatory authority, the National Pension Commission (PenCom) on the allegation of unjust termination of appointment of some workers and alleged untowards practices, The Nation has learnt.

    This was made known in the third quarter of 2016 Regulatory and Supervisory Activities report of the commission obtained by the newspaper.

    Although PenCom did not mention the name of the PFAs, it stated that it continued its consultative philosophy in regulating and supervising the industry.

    The commission said it also uncovered major issues from the review of the compliance reports forwarded by the operators during the quarter.

    They are un-credited pension contributions, delay in the payment of retirement benefits to the retirees.

    There was also the issue of delay in the transfer of approved Nigeria Social Insurance Trust Fund (NSITF) Contributors’ Balances to their Retirement Savings Account (RSAs).

    According to the commission, the risk-based examination approach was implemented as a way of promoting transparency and providing early warning signals as well as encourage pension operators to regularly self-evaluate their positions.

    The report read: “The commission had conducted Routine Examinations on  nine operators during the third quarter of 2016.

    “During the quarter under review, two target examinations were conducted on two PFAs on the allegation of unjust termination of appointment of some staff and alleged wanton practices.

    “The commission had forwarded letters to the operators involved on the issues and had been working towards resolving the issues. In addition, some of the issues were also raised and discussed with the operators during the on-site examination’’.

     

  • Premium to pay enhanced pension

    Premium Pension Limited, one of the Pension Fund Administrators (PFAs) in the country, is set to pay the enhanced monthly pension to its retirees  from  this month.

    Its  Acting Managing Director,Kabir Tijjani, made this known in Lagos, saying the action  followed a directive from the National Pension Commission (PenCom) .

    Tiijani said the increase only applies to pensioners under the Programmed Withdrawal pension payment mode.

    He stated that the essence of the upward review of the monthly pension is to ensure that it synchronises with growth in pension funds and respond to the yearnings of the retirees.

    He stressed that the increase of the monthly pension of all retirees on Programmed Withdrawal is due to the income earned on investment of their pension asset being managed by the company.

    He said: “The upward review for the payment of monthly pension to retirees is a clear indication that Premium Pension fund rate has appreciated and become robust and more competitive in the pension industry.

    “The payment of enhanced pension will apply to retirees with reasonable balances in their Retirement Savings Accounts (RSAs), which has earned significant income overtime. This is an indication that RSA holders are made to benefit from increased Return on Investment of pension funds.”

    Premium Pension is one of the pioneer PFAs in the country with regional offices and branches spread across the country. The company manages 738,736 Retirement Savings Accounts (RSAs) and 46, 941 retirees and has paid since inception retirement benefits to the tune of over N132 billion while having pension Assets Under Management (AUM) in excess of N500 billion Naira as at November, 2017.

  • Lagos bags pension award 

    Lagos bags pension award 

    Lagos State government has been  honoured  with a pension award for demonstrating commitment to its pensioners and full implementation of the Pension Reform Act of 2004.

    The awardee, Managing Director, Peter Adedeji Peninscope Professional Warranty Limited  while presenting the award at the Public Lecture, Award and Luncheon of 6th Edition, Peniscope Magazine, with theme: Government Policies as it Affects Various Investment Options of Pension and Insurance Fund, said the state choice was  based on investigation and feedback from state pensioners.

    Governor Akinwunmi Ambode while receiving the award titled, Award For Excellence on Pension Matters re-stated the continuing and irrevocable commitment of his present administration to the welfare of pensioners, the dutiful discharge of pension obligations, and the regular reform and retooling of the government’s pension systems from time to time and as the exigencies of the times may demand.

    The governor who was represented by the Commissioner, Ministry of Establishments, Training And Pensions, Akintola Benson, noted that the theme of the event was wide enough to encompass  the intersections between government policies and the level of returns on the investment of pension and insurance funds.

    He said: “I wish to briefly reiterate the convictions that ought to be deeply appreciated and kept in view by all the stakeholders in the pension administration system. These convictions relate to the holistic and multiplier benefits that a properly managed and administered pension system has to offer all stakeholders.

    The Lagos State Government thus demonstrated its virtuous moral compass such that, under the administration the current Governor’s administration in particular, the State Government has faithfully honoured its obligations under the Law.

     

     

    The vehicle for demonstrating this commitment has been the Lagos State Pension Commission (LASPEC) which was established as a corporate entity to regulate, supervise and ensure the effective administration of pension matters in the Lagos State Public Service.

    “The passage of the law itself was in response to the new model and standards of pension administration formulated under the federal Pension Reform Act 2004. Without an iota of doubt, LASPEC has performed brilliantly in discharging the trust entrusted to its care. Furthermore, and as you well know, the Lagos State Government has been consistently winning the National Pension Commission’s award for the Best Pensions Compliant State in the Federation.”

    He stressed that they aim to maintain this rating by continuing and improving on the timely payment of all pensions and other applicable benefits to our retiring workers upon disengagement from service.

     

  • PenCom mulls pension increase

    PenCom mulls pension increase

    •33% arrears for CPS pensioners

    The National Pension Commission (PenCom) will ensure that Federal Government pensioners under the Contributory Pension Scheme (CPS) have their pensions increased every five years or when salaries are increased as stipulated in Section 173 of the 1999 Constitution, The Nation has learnt.

    The pensioners will also receive 33 per cent increase just as delays in pension payment to new retirees under the new scheme will stop.

    A source at the Commission, who spoke on condition of anonymity, said only pensioners under the old scheme, Defined Benefit Scheme (DBS), were enjoying this privilege.

    The source said the Commission has met President Muhammadu Buhari on the matter with a view to rectifying the shortcoming.

    He said: “There is a major issue bordering on pensioners under the CPS before the Commission and the Presidency. Under Section 173 of the 1999 Constitution, it is stpulated that pension should be increased every five years.

    “When the new scheme commenced in 2007 with movement of workers into the scheme, there was salary increase. Corresponding increase was also made later. Pensions of pensioners under the DBS were increased, but those under the CPS were not.

    “The issue of 33 per cent will also be addressed. The Commission wants CPS pensioners to also enjoy the 33 per cent, the same way DBS pensioners are enjoying it.

    He said Buhari was alarmed on hearing the discrepancies and asked the Commission to write a formal letter to the Presidency.

    “The president also directed the Ministry of Finance to follow up the request for it to be granted. He has asked for reasons for the delays in pension benefits to retirees after retirement. As a result of this, the government is presently paying accrued benefits and the payments to pensioners will now be regular,” the source added.

    PenCom has, in recent times, been working to administratively improve on the benefits of the CPS.

    Its Acting Director-General, Aisha Dahir–Umar in a paper presentation on the scheme to Senate Committee on Pension, had said: “As it is the case with every human endeavour, the pension reform had its own share of challenges.

    “These challenges, however, could all be addressed within the framework of the CPS. Indeed, there had been many challenges that were over years addressed administratively by PenCom and recently through legislative action under the PRA 2014.

    “There is, therefore, a dire need to consolidate the gains of the CPS and avoid policy reversals as this would undermine public confidence and negatively impact the Nigerian economy, Federal Government’s change agenda and economic recovery plans.”

     

  • Lagos pays N1b to 301 public service retirees

    Lagos pays N1b to 301 public service retirees

    The Lagos State government has paid N1,075 billion into the Retirement Savings Accounts (RSA) of 301 Contributory Pension Scheme (CPS) retirees for November.The beneficiaries are drawn from the  public service, including local government and State Universal Basic Education Board (SUBEB) retirees.

    Governor Akinwunmi Ambode, who was represented by the Commissioner for Establishments, Training and Pensions, Dr. Akintola Benson, at the 45th Retirement Benefit Bond Certificate Presentation Ceremony in Ikeja, Lagos, said he was interested in the retirees’ well-being, adding that the state was in the process of providing ID cards to pensioners  to enable them enjoy some benefits which they would have paid for.

    He noted that the administration, through the Lagos State Pension Commission (LASPEC), has been able to disburse more than N32 billion in accrued pension rights to 7,976 retirees from August 2015 to November, 2017.

    Describing the feat as an achievement other states would wish to attain, he said pensioners under the Pay-As-You-Go scheme receive their monthly pensions the same time active workers receive their salaries.

    He thanked the retirees for their services which brought out a better Lagos.

    LASPEC Director-General, Mrs. Folashade Onanuga, admonished the retirees on the importance of healthy living for them to enjoy their life in retirement.

    She also advised them to make decisions on either to receive their pension entitlement through the Life Annuity or Programmed Withdrawal, urging them to  critically study the educative materials on the two options and make decisions that they are comfortable with.

    One of the retirees, Mr. Adebayo Olayinka, prayed for the governor and wished him a second term in office. He also lauded LASPEC workers for their diligence.

    Another retiree, Mrs. Olufunke Atitebi, said there is a ‘big’ difference in the way Lagos retirees get their entitlements under Governor Ambode compared to what obtained before the governor came on board. “The monthly payment has made Lagos to stand out,”she said, urging the governor to keep up the good work and prayed God to continue to uphold and assist him in governance.  She, however, asked the government to find a way of assisting retirees and their families, adding that priority should be given to retirees’ children during recruitment exercise into the state civil service.

  • Retirees to get increment on monthly pension

    Retirees to get increment on monthly pension

    • PenCom rejects proposed 75% pension lump sum Bill

    About 70 per cent of retirees receiving monthly pension through the Programme Withdrawal mode will from this month receive an increase in their monthly pension payments, The Nation has learnt.

    This is coming on the heels of findings by the National Pension Commission (PenCom), that earnings of retirees under the Contributory Pension Scheme (CPS) have grown more, based on investment of their pension fund made by their various Pension Fund Administrators (PFAs).

    As a result, the commission sought approval from the Presidency to increase pensions of retirees in the country.

    It was also gathered that PenCom has kicked against Senator Wammako’s proposed “Bill to Amend the Pension Reform Act (PRA) 2014 to Provide for Definite Percentage a Retiree Can Withdraw from His RSA and or Other Matters Related Thereto.”

    PenCom’s Acting Director-General, Aisha Dahir–Umar, affirmed the pension increase plan in a memo submitted by PenCom to the Senate Committee on Establishment and Public Service at the Public Hearing made available to journalists in Lagos.

    She said: “Indeed, the Commission has just concluded an exercise to increase the monthly pensions of all retirees on Programme Withdrawal due to the income earned on investing their pension assets. The outcome of this exercise showed that 30 per cent of the retirees would not benefit from the increase due to insignificant income earned on the small balances in their respective RSAs.

    “The payment of enhanced pension would apply only to those retirees that left reasonable balances in their RSA, which has earned income over time. The payment will commence in December, 2017. This indicates that indeed the return on investment of pension fund is being utilised for the benefit of RSA holders.”

    On the Bill seeking for 75 per cent lump sum, Aisha Dahir–Umar said: “Section 2 (b) of the Bill  seeks to amend Section 7(1) of the PRA 2014 by inserting the words “of up to 75 per cent” immediately after the words “a lump sum.”

    She said the import of the proposed amendment, is to allow the retirees of all categories to withdraw up to 75 per cent of the balance in their Retirement Savings Account (RSAs) as lump sum, irrespective of whether or not the balance would be sufficient to procure a programmed fund withdrawals, or annuity for life.

    She pointed out that the commission considers the proposal for payment of 75 per cent of RSA balance as lump sum to a retiree, as faulty due to many reasons.

    “The proposal is based on a misunderstanding of the concept of pension payment under the CPS. It is trite that lump sum should not be fixed. Rather, what should be implemented is a minimum replacement ratio as monthly pensions. Accordingly, the retiree should keep an amount of monthly pension as replacement of salary over an expected life span. Whatever remains over that amount, may be taken as lump sum. The current replacement ratio under the CPS is 50 per cent of last pay by virtue of the provisions of the PRA 2014, and regulations issued by the Commission.

    “It is noted that one of the objectives of the CPS is to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age. The proposed amendment would mean leaving only 25 per cent to be spread over lifespan of retiree, which may be longer than 20 years, thus giving a meagre monthly pensions below the current replacement ratio of a minimum of 50 per cent of last pay. It is doubtful if the 25 per cent balance in a retiree’s RSA, after deduction of 75 per cent lump sum, would, if spread through the retiree’s expected life span, be adequate to reasonably cater for his livelihood during old age. This proposal is never the case in ALL jurisdictions operating the Contributory Pension Scheme the world over.”

    She noted that rather than canvass for payment of 75 per cent lump sum, we believe that the remedy lies in the implementation of the provision of Section 4(4)(a) of the PRA, 2014 dealing with payment of additional benefits upon retirement.”

    According to her, it provides that “notwithstanding any of the provisions of this Act, an employer may then agree on payment of additional benefits to the employee upon retirement”. This would enhance the amount that employees may receive as lump sum upon their retirement.

    She submitted that the proposed Bill appears to undermine the essence of pensions as enshrined in the Constitution of the Federal Republic of Nigeria 1999 (as amended), as it would deny the retirees an adequate periodic income in retirement.

    She urged the Senate Committee to disregard the Bill and, instead, seek for the implementation of the provision of Section 4(4)(a) of the PRA 2014 on the payment of additional benefits by the employer as well as the institution of the Zero Pillar pension in Nigeria.

  • Law Union achieves 60% target

    Law Union and Rock Insurance Plc has achieved about 60 per cent of its bottom line target for 2017, as it recorded N3.53 billion, its Managing Director, Jide Orimolade, has said.

    Orimolade, who made this known during a media parley in Lagos, said the company had a target of N5.2 billion, but was able to achieve about N3.531billion as at November 2017.

    He stated that the company was optimistic of achieving the balance of its target before the end of the year.

    He disclosed that the company has paid over N1.25 billion claims in the period under review, noting that it has reviewed its claims processes to ensure that claims payment is done within a short time and that there are efforts to digitalise claims payment process.

    Speaking further on its financial performance for nine months, he said from January to September 2017, the firm’s gross premium written for 2017, stood at N3.51 billion as against N3.19 billion in 2016. Investment income, N611.86 million; profit before tax, N727.87 million; retailed earning N470.56 million; shareholders’ fund, N6.22 billion and total assets, N10.36 billion.

     

  • CIIN: Secondary schools offer insurance

    Government secondary schools in 13 states and the Federal Capital Teritory (FCT), Abuja, are  offering Insurance as a subject in their syllabus, the President, Chartered Insurance Institute of Nigerian (CIIN), Mrs. Funmi Babington-Ashaye, has said.

    Mrs Babington-Ashaye, who made this known at a media briefing organised by the institute in Lagos, listed the states to include Lagos, Enugu, Rivers, Edo, Imo, Ekiti, Kwara, Ondo, Osun, Oyo, Ogun, Kaduna, Kano and Abuja.

    This, according to her, is happening as a result of the initiation of the secondary textbooks programme adopted by the institute, adding that CIIN is proud that the initiative has started yielding good results as students across the country now write insurance at the West African Examinations Council (WEAC).

    She said: “We are now in 14 states; recently, we visited Edo State and when the governor received us, he was surprised to know that students now write insurance at ‘O’Level.

    “We are not there yet in terms of catching the youth at young age in a bid to ensure that everybody embraces insurance, but it is getting better. Some states now encourage their children to take insurance as a subject in secondary schools.”

    The institute, she said, is currently working with the University of Lagos (Unilag) to introduce an Executive Master’s Degree programme in Insurance and Risk Management, which will be structured like the programme of Cass Business School (CBS), United Kingdom (UK). She added that on successful completion of the CBS Master programme in Insurance & Risk Management, for instance, its graduates are usually eligible to predetermined exemptions from both the CII UK and Nigeria qualifying examinations.

    “This also facilitates the attainment of the Chartered Institute of Advanced Diploma of both UK & Nigeria. Our desire is to replicate this programme in partnership with the University of Lagos for the benefit of our members”, she said.

     

    The University of Lagos Team in conjunction with the Institute and Rector of the College of Insurance & Financial Studies are presently working on the content of the proposed MSC Risk Management and Insurance Programme. Also, a series of top level meetings are being held by all the key stakeholders to fashion out the best possible modalities for the programme,” she said.

     

  • Premium Pension holds officers’ forum

    Premium Pension Limited has held Pension Desk Officers Forum to identify challenges that may face its over 700,000 Retirement Savings Accounts (RSAs) holders and proffer solutions, Executive Director and Acting Managing Director of the company, Kabir Ahmed Tijani has said.

    He made this known at the forum, which held last week. It was organised by the Federal Capital Territory (FCT) region of the company.

    According to him, the forum enabled the company to touch base with the pension desk officers of various organisations and collectively evaluate the workings of the Contributory Pension Scheme (CPS), essentially to enhance operational effectiveness.

    He explained that it is also a routine industry requirement that provides opportunity for stakeholders to keep abreast of current trends in the industry.

    He said: “There are still challenges in the CPS 13 years after inception, especially in the area of public awareness of the law and the workings of the scheme. The regulatory bodies, National Pension Commission, (PenCom) and National Association of Pension Operators of Nigeria, (PenOp) have been doing a lot in the area of public awareness of the immense advantages and desirability of the scheme.”

    The forum provided a platform to appreciate the tremendous success Premium Pension has witnessed since coming on stream in 2005. Presentations were made on Electronic Pension Contribution Collection System (EPCCOS), withdrawal from voluntary contribution and enhanced programmed withdrawal and also the soon-to-be-introduced Multi-fund Structure.

  • Pension fund hits N7.2tr

    Pension fund hits N7.2tr

    Nigeria’s pension fund assets under the  Contributory Pension Scheme (CPS) have hit N7.164 trillion– as at September  from the N7.094 trillion recorded in August.

    The increase in the assets represents a 21.34 percentage growth and N1.26 billion increase.

    But despite this achievement, reports show that a lot may still be wrong with investing the fund for Nigeria’s infrastructural development.

    Investigation by The Nation showed that although the fund is not growing as projected by the commission owing to recession, the pension fund may in few years reach N10 trillion mark going by the projected average growth of N30 billion.

    This was shown in the September Summary of Pension Fund Assets Report released by the National Pension Commission (PenCom).

    According to the report, only N5.235 billion is recorded as infrastructure fund, a wide gap from the Federal Government Bonds which received the larger chunk of the fund.

    The report showed that a total of N3.874 trillion out of the total N7.16 trillion was invested in FGN bonds in the period under review.

    Treasury bill received  the second largest chunk of the fund with N1.27 trillion. The investment in this area is  lower than the N1.31 trillion in the period under review.

    State government bonds, however, got N155.7 billion, Agency Bonds (NMRC and FMBN) got N5.85 billion, Corporate Debt Securities got N264.7 billion while Supra-National Bonds got N11.73 billion

    The pattern of investment shows that Pension Fund Administrators (PFAs) have great confidence in FGN Securities.

    In the Local Money Market, a total of N489.57 billion was invested in the bank while N55.417 billion was invested in commercial papers.

    Under Mutual funds, infrastructure funds got N5.235 billion, cash and other assets got N27.33 billion; and real estates got N208.71 billion.

    The sum of N501.43 billion representing 7.06 per cent of the fund was invested in local money market securities. The fund was invested in banks as fixed deposit and commercial papers. The percentage invested this year in this area dropped from 7.5 per cent to 7.06 per cent between August 2016 and August 2017.