The Nation Newspaper

Category: Pension

  • Prepare your will, Stanbic Trustee advises RSAs, others

    Stanbic IBTC Trustees Limited has reiterated the need for working Nigerians to be prudent by preparing a will that ensures that their assets are distributed to their beneficiaries according to their wishes when they pass on.

    Chief Executive, SITL, Mrs Binta Max-Gbinije, stated this yesterday at a press conference organised by the company in Lagos.

    She said the workers could avoid subjecting their beneficiaries to the rigours of going through the process of obtaining letter of administration from the probate court to authenticate their identity.

    She said the company’s Will Service covers the balance in Retirement Savings Account (RSA) holders irrespective of their Pension Fund Administrator (PFA).

    She said there is also a comprehensive will, which covers the customer’s assets, including real estate, cash in bank, shares and private companies.

    She said trustees would ensure that families do not suffer while they are waiting for letters of administration which could take up to five years to process.

    She said: “We advise people to get a will. To get a will can take between three and six months and you will have a right of probate which goes to the National Pension Commission (PenCom). The Commission verifies that it is authentic, and instructs your PFA to pay on that basis. The beneficiary is then paid as it was stated in the will.

    “We advise people to get a will because if you don’t have a will and you die intestate, your beneficiary will be required to get a letter of administration. Where a person dies intestate, the process takes up to between one and five years for your beneficiary to get paid. The processing of getting a will is far better than going through the rigours of getting letter of administration and many families suffer as a result of this.”

    Mrs Max-Gbinije explained that there is a difference between next of kin (NoK) and a beneficiary. She said a NoK only serves as a contact person while the beneficiary is the one who will enjoy whatever is stated in the will.

    She said the firm’s trustee service guarantees peace of mind, knowing that one’s wealth would be distributed to the right people by one’s trustees.

    She explained that Stanbic Trustees provides estate planning and administration services offered as a private trust service to high net-worth individuals and group of individuals who may appoint us as trustee or executor of their estates.

    “We also leverage on our international parentage to offer trust services to foreign multinationals that require the services of a local based corporate trustee. We focus on providing institutional trust and loan agency services as well as estate planning and inter-generational wealth transfer. Our institutional trust service handles trustee agency functions in relation to debt issues and syndicated lending transactions, acting as a representative of the bond/other debt holders and group of banks/ financial institutions,” he said.

  • ‘Pension industry records macroeconomic growth

    ‘Pension industry records macroeconomic growth

    The pension industry operated under an improved macroeconomic environment in the third quarter of 2015 compared to the second quarter, the National Pension Commission (PenCom) has said.

    In its third quarter summary report. the body said inflation rate grew by 0.90 per cent, from 8.50 per cent in the second quarter to 9.40 per cent in the third quarter. The increase in rate of inflation signaled a potential negative impact on the real rate of return on pension fund investments during the quarter under review.

    The report made available to reporters in Lagos showed that the real Gross Domestic Product (GDP) grew by 2.84 per cent relative to a growth rate of 2.35 per cent, recorded in the second quarter, representing a marginal increase of 0.49 per cent.

    On developments in the stock market, the report stated that the Nigerian Stock Exchange (NSE) introduced NSE Pension Index during the quarter under review.

    The report said: “The constituents of the Index were selected in accordance with the criteria as defined by the regulations on Pension Fund Investment issued by the Commission. The NSE Pension 40 Index values would provide a tracking mechanism for the Commission to monitor compliance as well as serve as performance benchmark for Pension Fund Managers, investors and other fund managers.

    “Performance indicators of the Nigerian Stock Market showed declines in the third quarter of 2015 relative to the figures in the second quarter. The market capitalisation dropped slightly from N17.02 trillion in the second quarter to N17.01 trillion, representing a marginal decline of 0.06 per cent.

    “The market capitalisation of the new NSE Pension 40 Index, which represented 26.98 per cent of the total market capitalisation closed at N4.59 trillion in the quarter. The NSE All share Index (NSE ASI) during the quarter closed at 31,217.77, which was 6.69 per cent lower than the preceding quarter.

    “However, while the volume of shares traded increased marginally by 0.20 billion during the quarter, the value of shares traded witnessed a decline by 18.48 per cent from N278.15 billion at the end of second quarter to N226.76 billion at the end of the third quarter.”

    In the Bond market, the period under review did not witness the issuance of any new Federal Government (FGN) Bonds. However, there was reopening of the five and 20-year tranches during the review period.

    “The five-year tenors were offered for the amount in the range of N35 billion and N45 billion while the 20-year tenor was offered for amounts in the range of N25 billion and N35 billion. The marginal rates for the bonds ranged from 12.15 to 15.54 per cent similar to the preceding quarter.

    “Also in the money market, the stance of monetary policy remained restrictive in the third quarter of 2015 as the Monetary Policy Rate (MPR) was maintained at 13 per cent, while the Cash Reserve Ratio (CRR) was reduced from 31 to 25 per cent. The liquidity ratio was maintained at 30 per cent for the period under review as a check to the threat of rising prices.’’

  • CalPERS returns likely to be flat’

    California Public Employees’ Retirement System (CalPERS) Chief Investment Officer Ted Eliopoulos has said the pension fund’s current fiscal year performance may likely be flat.

    CalPERS, the biggest U.S. public pension fund, plans to announce its annual returns for the 12 months ending June 30 in mid-July.

    Eliopoulos warned CalPERS Investment Committee that the coming three to five years will be a challenging market environment for us. “It is going to test us,” he said at the board meeting.

    CalPERS lowered its performance expectations in each major asset class.

    The fund’s primary pension consultant, Wilshire Associates, predicted that the total fund, estimated to be worth $293.6 billion, will return 6.4 per cent annually over the next decade, reduced from a 2013 forecast of 7.1 per cent.

    • Culled from Reuters
  • PenCom to employers: no compliance certificates, no business transaction

    PenCom to employers: no compliance certificates, no business transaction

    The National Pension Commission (PenCom) and the Bureau of Public Procurement (BPP) have agreed that henceforth, only compliance certificates issued by the commission would be the valid evidence of compliance with the Public Procurement Act 2007, PenCom Director-General, Mrs Chinelo Anohu-Amazu has said.

    The PenCom boss who made this known in a report on level of compliance with the Pension Reform Act (PRA) 2014 said the Commission has been working with the Financial Reporting Council (formerly Nigeria Accounting Standard Board), through a Joint Committee, to include report on compliance with the provisions of the PRA 2014 as part of the disclosure requirements in audited financial statement of all organisations that employ a minimum of three staff.

    She said going forward the Federal Government will not transact any business with private sector organisations that do not have compliance certificates issued by PenCom.

    According to her, the decision was reached as a result of MDAs’ reluctance to ensure that companies bidding for works have fulfilled their obligations relating to pensions as enunciated in the Public Procurement Act 2007.

    She explained that for a private organisation to be issued a compliance certificate by PenCom, the organisation must have complied with the provisions of the Pension Reform Act (PRA) 2014.

    She further said the provision requires that to be issued with the certificate, employers must submit evidence of remitting contributions to the Retirement Savings Accounts (RSA) of their employees as well as show evidence of valid group life insurance policy.

    She noted that all  Ministries, Departments and Agencies (MDAs) of the Federal Government are required to demand for the compliance certificate as a requirement for transacting any business with a private sector organisation.

    She said: “With effect from January 2012, private sector employers that comply with the provisions of the PRA 2014 are issued annual certificates of compliance. To be issued with the certificate, employers are required to submit evidence of remitting contributions to the Retirement Savings Accounts (RSA) of their employees as well as show evidence of valid group life insurance policy.

    “All MDAs are required to demand for the compliance certificate as a requirement for transacting any business with a private sector organisation. Appropriate circulars have been issued to all MDAs in that regard. Also, the Commission monitors advertisements for contract by MDA to ensure that the pre-qualification criteria included evidence of compliance with the PRA 2014.

    “In 2015, 3,620 employers were issued compliance certificates. The main reason for the low number of requests being the reluctance of MDAs to ensure that companies bidding for works have fulfilled their obligations relating to pensions as enunciated in the Public Procurement Act 2007.

    “Methods deployed by MDAs to avoid complying included the exclusion of the pension requirement in the advertisement for contractors and/or acceptance of spurious evidence of compliance from the contractors. To address the lapses, the Commission and the BPP have agreed that henceforth only Certificates issued by the Commission would be the valid evidence of compliance with the Public Procurement Act 2007.

    “The Commission has been working with the Financial Reporting Council (formerly Nigeria Accounting Standard Board), through a Joint Committee, to include report on compliance with the provisions of the PRA 2014 as part of the disclosure requirements in Audited Financial Statement of all organizations that employ a minimum of three staff.”

    She noted that while the Committee is yet to conclude its work, it is expected that the new International Financial Reporting Standards (IFRS) would include this requirement.

  • ‘Pension funds can boost economy’

    With necessary measures put in place and the right steps taken by the Federal Government, pension funds may be the solid backbone required to jumpstart Nigeria’s economy beginning from massive infrastructural development.

    Head, Corporate Communication, Premium Pension Limited, Paddy Ezeala, made this statement in a report made available to reporters in Lagos and titled: “The liquidity squeeze and the traction of pension funds.”

    According to him, the Contributory Pension Scheme (CPS) has the potential to provide the necessary financial cushion in the nation’s drive to build a solid economy beginning with addressing our infrastructural deficiencies.

    He said it is gratifying that the investment portfolio in the pension industry has since 2010 been diversified to allow investments in infrastructure funds and bonds as well as other asset classes such as supranational bonds and private equity funds.

    He noted that from a deficit of more than two trillion naira in the old defined benefit scheme before 2004, the CPS is closing in on six trillion naira in the amassment of pension funds even when a fraction of this is illiquid.

    He said: “This is even with far less than 10 per cent market penetration in the pension industry. In other words, less than 10 per cent of Nigerian workers in the formal and informal sectors of the economy have enrolled in the CPS. This explains the great potential and immense possibilities of the industry.

  • Employers’ll pay 2% penalty fee on pension contribution default

    Employers’ll pay 2% penalty fee on pension contribution default

    Employers will pay two per cent penalty on non-remittance of the contribution as and when due, Director-General, National Pension Commission has said.

    The DG who made this known while speaking in Abuja, said this is in accordance to Section 11(6) & (7) and Section 24(d) of the Pension Reform Act (PRA), 2014.

    She said: “Non-remittance of the contribution as and when due attracts penalty to be stipulated by the Commission as enshrined under Section 11(6)&(7) and Section 24(d) of the PRA 2014.

    “The penalty shall not be less than two per cent of the unpaid contribution and is recoverable as a debt. Specifically, the Act made the remittance of contributions of employees of the Federal Government as a charge on the Consolidated Revenue Fund of the Federation with a mandate on the Accountant General of the Federation to make the appropriate deductions.”

    She stressed that Section 18(a) of the PRA, 2014 gives the Commission the power to enforce and administer the provisions of the Act.

    “This statutory provision also empowers the Commission to co-ordinate and enforce all other laws on pension and retirement benefits while ensuring the effective administration of pension matters.

    “The functions of the Commission under Section 23 of the PRA 2014 include the maintenance of data bank on pension matters and investigation and mitigation of complaints. Section 24(g) thereof further gives the Commission the powers to impose administrative or civil sanctions or fines on erring employers or operators.

    “The PRA also confer the right to request information from any employer on the pension matters. The combined effect of these sections grants the Commission powers to ensure compliance with the PRA under which the CPS was established”, she said.

  • Premium Pension is Pension-Company-of-the-Year

    Premium Pension Limited has emerged the winner at the 3rd BusinessToday Online Pension Company of the Year Award, 2015.

    The company was represented by Mr. Paddy Ezeala, the Head of Corporate Communication who described the award as the reward for commitment, dedication and tenacity of purpose.

    He said that the award also underlines the solid and productive relationship between the company and the media in the area of awareness generation on the workings and benefits of the pension industry..

    Speaking on the awards, Managing Director of BusinessToday Online, Ms. Nkechi Naeche said the award which is in its third edition seeks out exceptional individuals and companies.

    She stated that the companies and individuals have been outstanding in advancing the insurance and Pension industries within a particular year.

  • ‘Micro pension, others to alleviate old age poverty’

    Micro pensions, Minimum Pension Guarantee, Pension Protection Fund and Multi-Fund Investment Structure are initiatives by the pension industry in the direction of alleviating old age and household poverty, Stanbic IBTC Pension Compliance Officer, Idu Okwuosa has said.

    She made this statement while speaking on, “Alleviation of Old Age Poverty – Operator’s perspective” in the country at a pension event held in Lagos.

    She however stated that to further alleviate both old age poverty, there is the need to extend the Contributory Pension Scheme (CPS) to all sectors of the economy.

    She noted that as the poverty level keeps on rising in Nigeria, the social demand on government also keeps increasing and yet, poverty alleviation remains the thrust of government reforms.

    She said: “It appears that poverty alleviation is the motivation for the pensions reform of government. In the light of this, additional social programmes that address the welfare of the poor and poverty alleviation at large, deserve serious attention.

    “In the light of this, additional social programmes that address the welfare of the poor and poverty alleviation at large, deserve serious attention. The importance of pension provision will continue to grow as individuals begin to place less reliance on family to look after them in old age and begin to face the reality that they need to look after themselves by building a nest egg for the future.

  • Poland to revamp $35b pension fund

    Poland to revamp $35b pension fund

    Poland’s equity market is back under scrutiny as the country’s new leaders set their eyes on overhauling an industry that controls one-fifth of local stocks traded in Warsaw.

    The country’s pension fund industry, which manages $35 billion in assets, will be reviewed in the second half of the year as the government seeks to “improve the efficiency of their investments,” Deputy Labor Minister Marcin Zieleniecki said an interview yesterday. The nation’s 12 privately-managed funds, which have been active since 1999, were stripped of 51 per cent of their holdings in bonds in 2014, when a previous administration sought to reduce the country’s debt burden.

    Polish stocks have lagged behind peers in emerging markets as the government elected in October levied the highest taxes on bank assets in the European Union (EU) to fulfill campaign pledges to boost social spending.

    The latest planned overhaul puts at risk directives for pension funds, which were set up to provide a source of local, long-term financing for the nation’s growing companies as well as capital to businesses abroad in eastern Europe, including companies from cash-strapped Ukraine.

    “Uncertainty about the future of pension funds holds foreign investors, including us, from investing in Polish stocks, even if country’s macro story is attractive,” said Andras Szalkai, who helps oversee about $2 billion in emerging European assets as a fund manager at Raiffeisen Kapitalanlage GmbH in Vienna. “Until the final outcome of pension review is known, it’s difficult to weigh risk,” Szalkai added.

    Poland may consider merging all of the funds into one entity, which would be managed by state-controlled insurer PZU SA or lender Bank Gospodarstwa Krajowego, newspaper Rzeczpospolita reported on May 27, citing government sources it did not name.

    It’s too early to comment on any merger of pension funds, said Zieleniecki.

    “The government is aware that the wellbeing of the Warsaw Stock Exchange depends on pension funds. “But in this shape, the funds aren’t safeguarding future pensioners or investing efficiently,” Zieleniecki said by phone from Warsaw.

    Warsaw’s WIG20 index has dropped 11 per cent since October, compared with a 4.4 per cent slide in the MSCI Emerging Markets Index. Equities haven’t been the only loser, with the zloty weakening 3.2 percent against the euro this quarter, the fourth-biggest decline among 24 emerging markets. Polish government bonds have dropped, sending the 10-year yield up 28 basis points to 3.12 per cent.

    The cabinet may consider broadening investment options for the funds as their present stock-focused portfolios aren’t “efficient,” Zieleniecki said. The previous government took over the funds government bond holdings, canceled the debt and banned the institutional investors from purchasing such securities. Meanwhile, Warsaw’s WIG20 index has showed negative returns for three years running.

    The Chief Economist at ING Bank Slaski SA in Warsaw, Rafal Benecki said: “Investors have been shedding Polish stocks for a while, seeing risk of a massive sell-off of shares held by pension funds after a possible takeover of their assets by the state.

    “Such proposals, if communicated wrongly, may hit the zloty and other Polish assets.”

  • PenCom partners EFCC against defaulting employers

    PenCom partners EFCC against defaulting employers

    •Says non-remittance of pension is financial crime

    The National Pension Commission (PenCom) has approached the Economic and Financial Crimes Commission (EFCC) to prosecute companies deducting pension contributions from the emoluments of their employees and not remitting same.

    Director-General, National Pension Commission (PenCom), Mrs. Chinelo Anohu-Amazu, made this known in a report made available to reporters in Lagos. She said the Commission is aware of this worrisome development, which she said PenCom views as a financial crime.

    She noted that the employees whose pensions are deducted and not remitted often initiate investigations into the pension liabilities of companies by way of complaints.

    However, she said, instances abound where complaints of this nature gravely expose the employee to loss of job – an ultimate price for whistle-blowing on ground of the perpetuated illegalities of their employers.

    According to her, over 73,403 employers have been registered under the Contributory Pension Scheme (CPS) by the Commission.

    She said: “About seven million employees working with public and private sector employers have registered with Pension Funds Administrators (PFAs) for the management of their pension contributions.

    “The number of companies whose employees have so far registered is 73,403. Of this number, 43,918 employers with more than three employees have largely complied with the provisions of the PRA. The remaining 29,485 with less than three employees are mostly the non-compliant organisations. These categories of employers are usually more of portfolio companies and in some cases are companies that had either been liquidated or ceased to exist.”

    Speaking on remittance of monthly contributions, she said regular remittance of contributions is an important aspect of compliance with the law.

    “The monthly remittance by private sector has gradually improved and the returns for the month of December 2015 indicated that N45 billion or 70 per cent of the total expected remittance was remitted to 1,607,361 Retirement Savings Account (RSAs) holders.

    “The engagement of recovery agents in 2012 contributed in the improvement of the amount of average monthly remittance of pension contributions from N35 billion in 2011 to over N55 billion in 2015.

    “Through the efforts enumerated above, the pension assets of the industry have grown steadily from N110.69 billion in 2006 to N5.302 trillion in December, 2015. Similarly, the membership of the various pension schemes has grown from 1.6 million in 2006 to 6.89 million in December, 2015,” she added.