The Nation Newspaper

Category: Pension

  • Fed Govt retirees averse to new pension scheme

    Many retirees in the Federal Civil Service are yet to understand the new pension scheme – the Contributory Pension Scheme (CPS), investigation by The Nation, has shown.

    Many of them do not like the formula for computing pensions in the new scheme, while others  prefer the Pay As You Go scheme.

    The retirees are not happy with what they described as meagre lump sum and monthly pension payment to them under the new scheme and are unaware of the benefits and the aim of the government in ensuring a pension system that secures the future of older persons in terms of income security.

    Findings by The Nation showed that there are still misconceptions and ignorance about the new scheme among retirees of Federal  ministries, departments and agencies.

    Nigeria operated defined benefit schemes between January 1, 1946 and June 2004. The Pension Reform Act (PRA) was enacted on June 25, and became effective on July 1, 2004. The reform established a Defined Contributory (DC) scheme named the Contributory Pension Scheme (CPS) as against the old Defined Benefits (DB) scheme also known as Pay As You Go. The Act has, however, been repealed by the new Pension Reform Act, 2014.

    A defined benefit pension scheme, sometimes called a final salary pension scheme, promises to pay out an income based on how much a retiree earns after retirement. In this case, the amount a retiree gets at retirement is guaranteed and is paid to him.

    Under the old scheme, an employer promises a specified monthly benefit on retirement that is predetermined by a formula based on the employee’s earnings history, tenure of service and age, rather than depending on individual investment returns.

    Whereas the CPS, which is the defined contribution plan, a contribution rate is fixed. For instance, an employee contributes eight per cent of his monthly emolument while the employer also contributes 10 per cent. The retirement benefit is variable depending on the performance of the investment selected by a chosen Pension Fund Administrator (PFA).

    The old scheme was mostly unfunded, discriminatory and not portable. The employee was not entitled to pension benefits if he is dismissed from service. Also, there was no adequate provision to secure the pension fund. Following the unsatisfying nature of the old scheme, the unpleasant experiences faced by retirees and pensioners and the huge pension liabilities, it became apparent that there was need for reform.

    A major problem of the pension fund administration was the non-payment or delays in the payment of pension and gratuity by the Federal and state governments. For instance, the pension backlog was put at about N2.56 trillion as at December 2005.

    Sadly, millions of retired workers either lived in abject poverty or were often neglected after retirement. Retirees went through tough times and rigorous processes before they were paid their pensions, gratuity and other retirement benefits. Many times, the money to pay their benefits was not available. All of these problems in the old pension scheme led to the pension reforms of 2004, now repealed by the PRA 2014.

     

    The New Pensions 

    Reform Act of 2014

    The Pension Reform Act 2014 was enacted by the National Assembly  on July 1, last year to repeal the Pension Reform Act No. 2 of 2004 (“the 2004 Act”). The objective of the Act is to create a more effective pension administration system in Nigeria, to boost participation in the Pension Reform Scheme and to enforce worker’s welfare.

    A major innovation of the Act is the creation of a uniform Contributory Pension Scheme that applies to both public and private sectors. Essentially, the scheme  uniformly applies to all employees in the service of the Federation, the Federal Capital Territory (FCT) and the private sector and is meant to ensure that workers receive their retirement benefits promptly.

    Other key changes in the Act include an increase in the rate of employer, employee minimum contribution to the scheme, an increase in the minimum number of employees an employer is required to have to make contributions mandatory under the Act.

     

    Retirees’ impulse

    Ikushika Williams, a soon-to-be retiree of the Nigeria Customs Service is excited that he will be retiring in less than six months from now after 35 years of service.

    For him, the administration of the CPS is okay but prayed that government makes it ‘pay as you go’.

    His objections, however, are based on what he described as worrisome, saying it is akin to a situation where some people are controlling his money as if he is a child who is incapable of managing cash.

    He said: “The only painful thing for me is the fact that I have to be told what and how I spend my money. But I abide by the scheme because that is how the government wants it.

    “The good thing is that I don’t have to wait endlessly and queue under scorching sun before I get paid my pension.”

    But a woman lecturer at a federal university, who is retiring at the age of 60, is not pleased with the new system.

    She lashed on regulatory body, the National Pension Commission (PenCom), asking why the government would think pensioners were incapable of spending their money efficiently.

    She said: “I don’t know why PenCom would think that we are incapable of managing our finances if they give it to us. They are playing God and determining our age and death.

    “I think they should give us our money because we may even have better options. They are collecting our money now and in the future some group of people will mismanage or steal it. What did government do to people that stole the money in the past?

    ‘’A majority of us think this way and we have expressed ourselves to our various management.‘’

    A woman, who works with the Ministry of Defence, and will not want her name mentioned, said she is not happy with the new scheme, saying she prefers the old scheme.

    According to her, she could have received more money as against what she will receive under the new scheme.

    She said all they needed was for the government to work and improve on the old scheme.

    She said the new scheme would encourage workers to lie about their age because they would not want to retire early.

    An employee of the Nigerian Institute for Oceanography and Marine Research, Oparim Sabinos, hailed the government on the pension reforms.

    He said the old system was not consistent and was susceptible to fraud.

    “It is good to retire and receive your pension when you are still alive. I believe that one should not play pranks but retire when necessary.

    “The new pension system has been working well. The fact that they alert us and prepare us six months before retirement and after retirement, we can begin to receive pension payment one month after shows that it is a good system.

    “The CPS is good and I urge the new government of President Muhammadu Buhari to ensure that there is no corruption in the pension industry because it will endanger the lives of pensioners in the country.”

    Chief Okoli of the Nigerian Immigration Service, who worked for 35 years, is also happy with the new pension system.

    He however urged PenCom to continue to work and improve its achievements.

  • Cornerstone Insurance makes N1.04b profit

    Cornerstone Insurance Group has recorded a profit before tax of N1.04 billion in the financial year end, December 31, 2014 as against the N870.2 million it recorded in 2013.

    This represents a 20 per cent growth.

    The company’s profit after tax also grew by 11 percent to N946.48 million from N860.36 maillion the previous year.

    The underwriting firm, which has embarked on transformation in the last few years, has also paid a 0.02 kobo dividend, promising its shareholders greater future and value creation.

    Group Chairman of Cornerstone, Adedotun Sulaiman made this known at the company’s 23rd Annual General Meeting (AGM) in Lagos.

    He said the modest growth was achieved despite the challenging business environment experienced by the company last year.

    He said: “The financial performance in 2014 is a reflection of our deliberate focus on profitable underwriting and investment performance, while cautiously pursuing top-line growth.

    “While the gross premium written stood at N5.21 billion, gross premium income inched by 12 percent, moving from N4.62 billion in 2013 to N5.19 billion. Underwriting profit also rose by 60 percent from N939 million to N1.50 billion, even as the company met claims obligations to the tune of N1.23 billion in the year under review.

    “Other highlights of the result include a 12 percent growth in investment income to N999 million from N890 million in 2013. Shareholders equity appreciated by 12 percent from N6.90 billion in the previous year to N7.76 billion, while retained earnings moved from a negative N555 million in 2013 to N99 million in the year under review.”

    Shareholders, who were excited about the turnaround in the company, praised the board and the management, adding that the company after concluding its acquisition of Fin Insurance, would be better positioned for increased shareholders’value.

  • NICON Insurance gets award

    NICON Insurance gets award

    NICON Insurance Limited has received the Africa’s Most Reliable Quality Insurance Company of the Year Award.

    The ceremony was organised in Lagos by the African Quality Institute (AQI), the South African Quality Institute (SAQ) and the Chartered Quality Institute in United Kingdom (UK).

    The Editor of Quality World Journal, Mr. Michael Abugo, said the award was aimed at celebrating leadership innovation and creativity in quality management in Africa.

    Abugo, who doubled as the Master of Ceremony at the event, said: “The award is aimed at identifying, recognising and rewarding companies, personalities and products that apply quality assurance culture to achieve corporate objectives in both profit and non-profit making organisations in Africa”.

    The organiser also said this year’s award was based on the outcome of a technical committee made up of international quality professionals from South Africa and Nigeria, including Standards organisation officials from Ghana Bureau of Standards (GBS), Uganada Bureau of Standards, Standards Organisation of Nigeria (SON), National Standard Bureau Liberia, Africa Organisation for Standardisation (ARSO) and International Organisation of Standardisation.

    Presenting the award to NICON Insurance Limited, the Managing Director of Sparking Rose Nigeria Limited, Edward Oiku, urged the company to  maintain its standard.

    NICON Insurance’s General Manager (Head Office Annex), Mr. Steve Ajudua, who represented the Managing Director, Mr. Bayode Samuel, said the firm has been re-energised to serve the public better.

    He added that the company is Africa’s leading insurance and financial services power house that has snowballed into a global player with newly minted core values that has translated her into an enduring institution of over 40 years.

  • Cash crunch takes toll on compliance with pension rate

    Cash crunch takes toll on compliance with pension rate

    One year after a new rate was fixed under the Contributory Pension Scheme (CPS), some pension operators have said less than 50 per cent of employers have complied with the new law while others believe compliance level is far below average, Omobola Tolu-Kusimo writes.

    Over 50 per cent of employers in the public and private sectors are yet to comply with the new pension contribution rate of 10 and eight per cent respectively one year after the Pension Reform Act (PRA), 2014 was enacted.

    Some experts have attributed the low and slow level of compliance to the cash crunch in the nation’s economy.

    The PRA revised the rate of contribution by employers and employees from 7.5 per cent each to 10 and eight per cent respectively, with effect from July 1 last year.

    Some pension operators who spoke with The Nation said less than 50 per cent are complying with the new law while others believe compliance level is far below average.

    • Yola
    • Yola

    Chairman Pension Fund Operators Association of Nigeria (PenOp) and Managing Director, Legacy Pension, Misbau Yola said some employers in the private sector have complied while the public service has not complied.

    He said compliance from the public service seems to be quite difficult now because governments, both at state and federal level have some challenges.

    Managing Director, Crusader Sterling Pensions Limited, Adeniyi Falade said over 50 per cent employers have not complied with the new rate.

    He attributed the delay by some employers to comply to the cash crunch in the nation’s economy, adding that it has contributed to the low level of compliance.

    Managing Director, UBA Pension Custodian, Bayo Yusuf said not all employers have started remitting the new rate to the employee’s account.

    He, however, stated that PenCom will detect any employer who is still remitting the old rate.

    He said: “It is fine if an employer is remitting based on old rate, the audit by PenCom will discover such employers.

    “Some of the companies are already complying and I believe they will fully adjust as time goes on.”

    Head, Research and Corporate Strategy Department PenCom, Dr. Farouk Aminu said PenCom as the regulator, it will take necessary steps if it discovers that there are employers that are yet to contribute the new rate as stipulated by the PRA, 2014.

    He urged employees whose employers are yet to remit the new rate to inform the Commission.

    He said employees or anyone who have information about employers whom the scheme applies and may not want their identity to be made public should do so under the condition of anonymity.

    According to the PRA, there is established for any employment in the Federal Republic of Nigeria, a Contributory Pension Scheme (CPS) for payment of retirement benefits of employees to whom the scheme applies.

    The scheme established under subsection (1) of the PRA shall apply to all employees in the public service of the federation, federal capital territory, states, local governments and the private sector.

    The contribution for any employee shall be made in rates relating to his monthly emoluments which is a minimum of 10 per cent by the employer and a minimum of eight per cent by the employee.

    The rates of contribution may upon agreement between any employer and employee, be revised upwards, from time to time, and the commission shall be notified of such revision.

    Also, any employee may, in addition to the total contributions being made by him and his employer, make voluntary contributions to his retirement savings account.

    Notwithstanding any of the provisions of the Act, an employer may agree on the payment of additional benefits to the employee upon retirement or elect to bear the full responsibility of the scheme provided that in such a case, the employer’s contribution shall not be less than 20 per cent of the monthly emoluments of the employee.

    In addition to the rates, every employer shall maintain a group life insurance policy in favour of each employee for a minimum of three times the annual total emolument of the employee and premium shall be paid not later than the date of commencement of the cover.

    Where however the employer failed, refused or omitted to make payment as and when due, the employer shall make arrangement to effect the payment of claims arising from the death of any staff in its employment during such period.

    But employers in the private sector and especially the public service seems to be disobeying the new law.

    Monthly pension contributions in the core civil service are centrally deducted by the Office of the Accountant-General of the Federation (OAGF) as advised by the Budget Office of the Federation (BOF) based on budgeted total, personnel costs with effect from

    With the commencement of the CPS, the National Pension Commission (Pen Com) was mandated by the Federal Government of Nigeria to ensure the remittance of pension contributions of employees of treasury-funded Ministries, Departments and Agencies (MDAs)

    The OAGF is responsible for remitting the contributions of Federal Government employees whose MDAs are under the Integrated Payroll & Personnel Information System (IPPIS)

  • PenCom advises retirees on nominal roll challenges

    Absence of personal identification numbers (PINs) or incomplete and incorrect PINs, inconsistent format for date of appointment, date of exit, have been identified as challenges facing nominal roll for retirees under the Contributory Pension Scheme (CPS).

    Others are incorrect salary structure, grade levels or steps not in line with applicable salary structures and slow or batch submissions by Ministries, Departments and Agencies (MDAs).

    Director-General, National Pension Commission (PenCom), Mrs. Chinelo Anohu-Amazu who spoke at the ongoing 2015 Pre-Retirement workshop for Prospective Retirees in the CPS,  said submission of correct nominal roll and other relevant documents will translate into accurate computation and remittance of employees’ pension contributions.

    She stated that this will also eliminate the various complaints being made by employees and retirees of treasury-funded MDAs.

    According to her, part of the matters arising from this challenge is that employees and retirees whose MDAs are under the Integrated Payroll& Personnel Information System (IPPIS) should liaise with their MDAs regarding promotion after PenCom enrolment if promotion date is after date of joining IPPIS.

    She added that employees and retirees whose MDAs are yet to join the IPPIS should forward evidence of promotion to the PenCom

    She said the implication is that PenCom ceased to make monthly remittances of pension contributions into RSAs of employees of MDAs from the period of joining IPPIS.

    Employees of agencies not under IPPIS but whose parent ministries have joined should use the names of their agencies as their employers when completing their enrolment forms, she advised.

    She said prospective retiree are required to enroll and  after enrolment liaise with Pension Fund Administrators (PFA) within six months to retirement, supply PFA with official notice of retirement from employer, provide other documents required by the PFA, re-introduce or confirm beneficiary or next of kin to PFA before or at retirement and provide details of bank account for receiving retirement benefits.

    She enjoined them to also provide contact address after retirement, negotiate mode of withdrawal of benefits with PFA.

    On processes for retirement under the CPS, she said that for a prospective retiree to be qualified for retirement benefit under the CPS, he or she shall undergo the process of verification and enrolment exercise.

    She added that due to lack of adequate data of Federal Government employees the PenCom organises annual enrolment exercise to determine the accrued Pension Rights for federal government employees due for retirement in subsequent year for budgetary provision and ensure the settlement of their benefits as and when due.

  • Axa secures $4.3b longevity swap with pension fund

    Axa U.K. Group Pension Scheme, London,has completed a £2.8 billion ($4.4 billion) longevity swap with Reinsurance Group of America for the defined benefit section of its retirement plans.

    The swap covers about half of the pension fund’s liabilities, said a news release from Axa U.K. The total asset size was not immediately available.

    The deal covers 11,000 members. The swap will form part of the pension fund’s investment portfolio, providing income in the event that members live longer than is currently expected.

    “By significantly derisking the scheme, this will benefit all our DB scheme members and will not affect any payments to members as they will continue to receive their pension as normal,” said Stephen Yandle, chairman, Axa U.K. Pension Trustees Ltd., in the release.

    Towers Watson Co. and Linklaters L.L.P. were lead advisers to the trustees and company.

    A spokeswoman for Axa was not available to comment.

    • Culled from Business Insurance.

  • Greek pensioners’ woes spelling debt relief for Kansas retirees

    Kansas officials have reason to hope Greece doesn’t sort out its debt impasse right away.

    The state plans to sell $1 billion of taxable bonds by mid-August to shore up its main pension fund, said Jim MacMurray, senior vice president of the Kansas Development Finance Authority, which is handling the sale. Kansas can’t sell the 30-year debt for yields above 5 percent, according to state law. It may be running out of room: Similar bonds that Kansas sold in 2004 with insurance have traded less than a half-percentage point below that level.

    Greece’s standoff with creditors over austerity measures such as pension cuts is helping keep Kansas’s bond plan alive. The euro-area tension is holding down interest rates by stoking demand for Treasuries even as bets build that the Federal Reserve is getting closer to raising borrowing costs.

    “We have interest-rate risk until we can get to market,” MacMurray said in an interview. “It’s certainly possible we could get hit by higher rates.”

    Kansas’s pension system, which covers 290,000 members in multiple funds, had two-thirds of the $24.8 billion it needed to pay promised benefits as of June 2014. Under Republican Governor Sam Brownback, the state opted for a controversial strategy to bolster the biggest of the plans, the Kansas Public Employees Retirement System, by borrowing and investing the proceeds with the hope of earning a higher return.

    In January, a group of state and local-government officials warned against the practice. The Government Finance Officers Association called it “speculative” and said it may backfire if investments don’t pan out.

  • Wapic introduces motor insurance, group life products

    Wapic Insurance Plc and Wapic Life Assurance Limited have re-introduced motor insurance product suite and group life insurance product aimed at meeting Nigerians budget and life style flexibility, the Group Managing Director of the company, Ashish Desai has said.

    He stated the motor insurance product suite has been rebranded and is now called “Moov” while the group life policy has been re-designed to address critical consumer needs while keeping them adequately protected against the financial impact of life’s risks whilst in employment

    Unveiling the value propositions for Moov and group life in Lagos, Desai said Moov, the motor insurance product in its new form has been designed to meet the yearnings of customers for budget and life style flexibility.

    An integral feature of the new product, he noted, is the fact that the consumers can custom-create their motor insurance cover.

    He said: “The motor product comes in four variants, which include Moov to cover third part motor insurance; Moov Plus for third party, fire and theft; Moov Prestige to cover basic comprehensive insurance while Moov Luxury is the maximum motor cover available.

    “Within each option, there is a menu of covers from which customers can make a choice based on their needs and budget. Each cover is priced separately while the customer can work out the cost using the online calculator provided. The company has also made the product more accessible for the insuring public as there are now various product purchase channels available to consumers.”

    He stressed that the launch of these products, further reinforce their commitment to excellence in customer service.

    Managing Director, Wapic Life, Niyi Onifade further explained that Group Life Insurance product is a compulsory class of cover for all employers with three or more employees.

    He said with this in mind, the life business, Wapic Life Assurance Limited, had similarly revamped this product to meet the needs of employers through simplified documentation, seamless payment process and enjoyable claim settlement for the benefit of their employees

  • Legislators push for Pension Reform Act’s implementation

    Legislators push for Pension Reform Act’s implementation

     The National Assembly is pushing for the full implementation of the Pension Reform Act, 2014 to ensure that retirees under the Defined Benefits Scheme enjoy the same comfort in retirement with that of their counterparts under the  Contributory Pension Scheme (CPS), writes Omobola Tolu-Kusimo

    Workers across the world are taking more than a passing interest in what befalls them when they retire.

    In Nigeria, the story is not different. Though the country has crossed a milestone in reforming its pension system, much more still needs to be done in terms of implementating the new pension law, the Pension Reform Act 2014.

    The National Assembly says consolidating the gains of pension reform in the country will require full implementation of the enabling law, urging its action to ensure that retirees under the Defined Benefits Scheme (DBS) and the Contributory Pension Scheme (CPS) enjoy comfort in retirement.

    They also believe that the implementation of the law will ensure that never again will retirees, who have served their fatherland meritoriously, roam the streets begging for alms.

    The ongoing pension reform in Nigeria started with the enactment  Act which established the National Pension Commission (PenCom) and the CPS.  That became necessary because the DBS was not fully funded by governments across the country.  Relief came the way of retirees under the old scheme in 2013 when the Federal Government reformed the DBS with the establishment of the Pension Transitional Arrangements Directorate (PTAD).

    One year after PTAD was established, the Pension Reform Act, 2014 was enacted to repeal and replace the 2004 Act.  The new law gave PenCom regulatory roles over PTAD and further strengthened the latter to deliver on its mandate of ensuring that pensioners under the DBS get their pensions as at when due.

     

    In the beginning

    Before the establishment of PTAD, the Federal Government had set up the Pension Reform Task Force, headed by Mr. Abdulrasheed Maina, to reform the DBS.  Members of the task force were later alleged to have helped themselves from the money meant to pay pensioners to the tune of billions of naira while many of retirees died in poverty.

    The allegations led to the sack of the task force and their job became a subject of investigation by the Seventh National Assembly.  Revelations of massive fraud perpetrated by the members of the team were unearthed even as Maina was said to have shunned invitation by the legislators to come and clear his name.

    Just lately, Maina and some members of his team, now answering fraud charges at various law courts, began sponsoring intensive media campaigns to disparage the revelations made by the National Assembly and showcase some unconfirmed achievements recorded by the team in an attempt to convince the President Muhammad Buhari to reinstate them.

    However, giving vivid details of the discoveries of the Senate Committee on States and Local Governments in the Seventh National Assembly, its Chairman, Senator Kabiru Gaya, observed that prior to pension reform in the country, government found it extremely difficult to address the issue of pensioners roaming the streets of major cities begging for alms as a result of non-payment of their pension or negligence on the part of those coordinating the pension system.

    Addressing participants at the just-concluded Stakeholders Sensitisation Conference on the Pension Reform Act  in Abuja, Senator Gaya recalled that under the DBS, many retirees died because of delay or refusal of government to pay their pension while negligence on the part of those who managed pension fund contributed to the plight of retirees under the old scheme.

    “The Defined Benefits Scheme caused death of retirees because their pension were either delayed or not paid at all for a long period as a result of corruption.  The introduction of the Contributory Pension Scheme will reduce corruption to the barest minimum if not erase it and stiffer laws and penalties should be looked into,” he said.

    Reflecting on “Consolidating the Gains of Pension Reform in Nigeria,” Gaya painted a gloomy picture of the DBS prior to the establishment of PTAD in 2013. According to him, the scheme was plagued by “lack of funding, insufficient budgetary provisions, mismanagement, maladministration, inadequate legal framework and constant death of retirees while awaiting their entitlements and high corruption” among other things.

    Also, giving an insight into the findings of the National Assembly Investigative Panel on Pension, he said pensioners found it difficult to get their entitlements.

    “Some of our members cried when they saw the pains these pensioners were going through.  Some of them have gone mental because they were asking for the claims and they could not get them and some of the people handling pension fund were having good time and good foods on their tables.  I personally assisted one of them financially because he was telling us several things as if we were the civil servants that failed to pay their pension.

    “During our investigations, we found that money was kept in banks for years and pensioners were not being paid.  One organisation paid N5 billion while it had N21 billion in its purse kept in banks generating interest while it refused to pay pensioners,” he said.

    He also stated some of the challenges the National Assembly surmounted in the course of making the pension laws saying “during our pension probe we had situations where some members of the Task Force became forces that we cannot fight.When we collated the report for the Chairman of the task force and members of his team to account for N195 billion, we invited him but he refused to appear.”

     

    Legislators’ effort

    Members of the National Assembly observed that with the establishment of PTAD, the gory tales they inundated with is now a thing of the past.  The Directorate is working very hard to bring back smiles to the faces of pensioners under the DBS.  The law makers also noted that to sustain the successes so far recorded with the old scheme, there is need to further strengthen PTAD by fully implementing the new pension law.

    Assuring PenCom of the support of the National Assembly in implementing the Pension Reform Act 2014 fully to meet the expectation of workers and retirees in the country,  Gaya recalled that the lawmakers had in the past made useful recommendations towards the successful reform of the pension industry and would support PenCom and other pension stakeholders to continue delivering on its mandates.

    “That is why we made about 122 recommendations to the Senate which include that funds should be in the custody of the Central Bank of Nigeria (CBN) not in commercial banks and that those already in commercial banks should be returned to CBN. I want to assure you that the National Assembly is ever supportive of  strengthening of this Act to alleviate the sufferings of our elder statesmen,” Gaya said.

    He also encouraged stakeholders in the pension industry to uphold best practice in the administration of retirement benefit fund in the country saying “PenCom, PTAD and all others should be diligent, prompt, transparent, honest and sincere in their days of service because they are also close to the net.

    “For us to move forward in this country, we have to fight corruption.  We have to be sincere in our jobs and for those who steal so much, once you cross a certain level all the money you accumulate is a waste.”

    The Deputy Chairman of the House of Representatives Committee on Pension, Hon. Samson Okwu in the Seventh Assembly also supported Gaya on the need to fully implement the new pension law.  Speaking during a Stakeholders Sensitisation Conference in Abuja, he encouraged pension stakeholders to fashion out ways to fully implement the new pension law to ensure that self-employed people and workers in the informal sector are brought under the CPS.

    He said: “I charge professionals to look into the law and system such that we can give guarantees to contributors.  Your contributions will pave the way for us to learn how all Nigerians can key into the system such that we will have a guaranty of savings for all Nigerians such that even the welder by the road side can be part of the scheme.

    “The Eighth National Assembly will partner the industry and we will work together to make the pension system better.”

    Justifying their push for full implementation of the law, the legislators observed the CPS is working perfectly and according to plans.  The scheme, is fully funded and retirees under it are getting their pension as at when due. There has not been any case of fraud or corruption in the system from inception, they said.

    The legislators however, noted that the only way to ensure that the gains so far made with the DBS will not be reverse is to fully implement the Pension Reform Act, 2014.  This will also ensure that situations where fund managers under the old scheme come in contact with pensioners’ money and may be tempted to divert or mismanage will be completely avoided.  The era where managers of the scheme deposit pensioners’ money to earn interest while pensioners wallow in abject poverty will be gone for good with the full implementation of the new pension law, they maintained.

    According to the law makers, for the DBS to succeed, it is important to further strengthen PTAD and ensure that the CBN continue to keep custody of all the money meant for pensioners under the DBS and pensioners’ entitlements continue to be transferred directly to their bank accounts from the apex bank after verification.  They want retirees under the old scheme to enjoy good life in retirement as much as their colleagues under the CPS, insisting that it is only the full implementation of the new pension law that will make all these possible.

     

    PTAD

    Established August 2013 in line with provision of Section 30(2) (a) of the Pension Reform Act, 2004 and now Section 42(1) of the Pension Reform Act 2014, the PTAD took over the management of the Defined Benefits pension schemes of federal parastatals and agencies and has been implementing a new structure, which is a clear departure from the old system and also introduced a new orientation to service delivery to meet the needs of pensioners.

    The pension law directed directors of the Civil Service Pension Department, Police Pension Department and Customs, Immigration and Prisons Pension Department to report to the Executive Secretary of the Directorate.  Also, all the Boards of Trustees of pension schemes being operated by FGN parastatals report to PTAD.

    PTAD Director-General, Nellie Mayshack, said the agency however prides itself as “progressively working hard” to sanitise the pension administration system and restore public confidence through effective management, accountability and transparency and alleviating the sufferings of pensioners through regular and prompt payments, constant communication and easily accessible to by retirees.

    The directorate also said it is improving service delivery to pensioners, ensuring effective planning and management of pension under the DBS and ensuring transparency and accountability in the management of pension funds while restoring confidence and trust in the system.

  • EIOPA’s solvency II-style pension proposals criticised

    EIOPA’s solvency II-style pension proposals criticised

    Responses to EIPOA’s consultation paper on further work it carried out on the solvency of Institutions for Occupational Retirement Provisions (IORPs) have been submitted over the past week, The Actuary has reported.

    EIPOA is the European Insurance and Occupational Pensions Authority.

    These include submissions by actuaries Barnett Waddingham and umbrella pensions body for the National Association of Pension Funds (NAPF).

    This consultation focuses on various difficult elements of the Holistic Balance Sheet (HBS) and identifies where further work is necessary in order to better specify or bring more clarity on some elements of it and on how it could be used in practice.

    Following the consultation and an impact study, EIOPA intends to provide advice to the European Commission on EU-wide solvency rules for pension schemes. One of these areas is the valuation of legally enforceable sponsor support. The overarching principle is market consistency when valuing liabilities and assets.

    The HBS is discussed as both a potential driver of capital requirements for pension schemes and as a risk-management tool.