The Nation Newspaper

Category: Pension

  • Private sector employers shun 18% pension contribution rate

    Private sector employers are not complying with the upward review of the pension contribution rate as stipulated by the Pension Reform Act, 2014, The Nation investigation has revealed.

    The Act reviewed upwards the minimum rate of pension contribution from 15 per cent to 18 per cent of monthly emolument.

    Following the review, eight per cent will be contributed by the employee, while 10 per cent would be borne by the employer.

    This is expected to provide additional benefits to workers’ Retirement Savings Accounts and thereby enhance their monthly pension benefits at retirement.

    The Act was signed into law by the President on 1 July 2014. The Act does not specify a commencement date. The Interpretation of the  Act provides that where no date of commencement is contained in an Act, the commencement day shall be the day the Act is passed or signed into law. Unless a commencement date is inserted before the Act is gazetted, the commencement date will be 1 July 2014.

    But while few have adjusted their company policies and effected the new rate, the majority of employers have refused to comply relying on the fact that the Act did not specify an effective date.

    Guaranty Trust Bank Spokesperson, Mrs Lola Odedina, while responding to whether or not the bank has implemented this section of the Act,  confirmed that the bank has started remitting its employees contribution based on the new rate.

    Managing Director, AIICO Pension Managers Limited, Eguarekhide Longe told The Nation that most employers from the private sector have not complied with the law.

    According to him, the employers are relying on the directive from their umbrella body, the Nigeria Employers’ Consultative Association’s (NECA) directive that they should not effect the law.

    He however, wondered if NECA has such powers to stop the implementation of the law.

    The AIICO boss said there is nothing they can do as pension fund administrators to make them comply.

    He said: “The employers are hiding under labour union and constitution saying compliance date was not clear. But compliance starts from the day the bill was assented to by the President, Goodluck Jonathan.

    “I believe the regulatory authority, the National Pension Commission (PenCom) will enforce the law and apply sanctions where necessary.

    PenCom Head Research and Corporate Strategy, Dr Farouk Aminu said the law cannot change or be delayed.

    The employers must obey the law because we are definitely going to effect the law.

    Aminu noted that the Commission will embark on sensitisation programme on the new Act in all the six-geopolitical zones in the country.

    He said the programme is starting from Lagos State on Thursday November 30 and will go round the other zones.

    He said that by the time, the commission is done with the programme, it will begin to enforce the law and sanction those who may continue to disregard it.

  • Premium Pension sends forth retiring board member

    The board and management of Premium Pension Limited, one of the pension fund administrators in the country have sent forth one of its retiring directors Mr. Ibrahim Alhassan Babayo, at a colorful luncheon ceremony held in Abuja recently.

    Chairman of the company’s board Mr. AliyuDikko in his remarks described Babayo as a very productive person who always worked with enthusiasm to uplift the company.

    He added that Babayo was an asset to the company noting that the acquisition of their head office has his strong imprints as he worked tirelessly to achieve that feat.

    Also commenting at the occasion, a member of the board Nelson Nweke described Babayo as a versatile person who is highly professional and resourceful.

    Managing Director of the company,  WilsonIdeva thanked Babayo for his immeasurable contributions and inspirational disposition towards  to the management.

    He expressed his pleasure working with him, describing him as  a special person whose advice the company immensely benefitted from.

    Responding, Babayo thanked the  foundational board members of the company for the solid foundation laid for the company to thrive in terms of good corporate governance. He expressed his deep appreciation for the warm reception accorded him as well as the cooperation of other board members over the past few years.

    Babayo joined the board of Premium Pension Limited on the 19th August, 2011. While on the board he served as Chairman of the Board Information Technology Committee and also as a member of Board Audit, Establishment and nominating committees. Babayo retired from the board of the company after successfully completing his tenure.

    The occasion also served as an opportunity to welcome back reappointed directors of the board in the persons of Architect YunusaYakubu and Mr. Usman Zarma. The chairman described them as hardworking founding fathers of Premium Pension Limited.

  • World’s top-ranked pension funds probed

    Denmark, home to the world’s top-ranked pension system, will toughen oversight of the $500 billion industry after regulators observed a surge in risk-taking linked in part to more widespread use of hedge funds, Bloomberg has reported.

    The Financial Supervisory Authority in Copenhagen will require pension funds to submit quarterly reports on their alternative investments to track their use of hedge funds, exposure to private equity and infrastructure projects. The decision follows funds’ failures to account adequately for risks in their investment strategies, according to an FSA report.

    The regulatory clampdown comes as Denmark deals with risks it says are inherent to a system due to be introduced across the European Union in 2016. The new rules will allow pension funds to invest according to a so-called prudent person model, rather than setting outright limits. In Denmark, the approach has proven problematic for the only EU country to have adopted the model, said Jan Parner, the FSA’s deputy director general for pensions.

    “The funds are setting up for their release from the quantitative requirements, but the problem is, it’s not clear what a prudent investment is,” Parner said in an interview. “The challenge for European supervisors is to explain to the industry what prudent investments are before the opposite ends up on the balance sheets.”

    Denmark, which has almost two years of experience with the approach after its early adoption in 2012, says a lack of clear guidelines invites misinterpretation as firms try to inflate returns.

  • Fed Govt owes NIPOST pensioners three years’arrears

    The Federal Government is owing the Nigeria Postal Service (NIPOST) pensioners three years pension arrears and gratuities, The Nation has learnt.

    Chairman, Association of NIPOST branch of the Nigeria Union of Pensioners, Comrade Steven Shokden, said though they were assured that money would be released by the Budget Office of the Federation, nothing had been paid to them.

    He said some of their members had not been paid their arrears and gratuities since 2011.

    He explained that some of the members were before 2011 paid up to 75 per cent of their pensions and gratuities, while others were paid only 25 per cent.

    Shokden said  there are some pensioners, who died in 1996 and 1997, whose families were yet to be paid their pension benefits, adding that the government is also owing those who were asked to resign 10 per cent severance in lieu of notice.

    He explained that the Budget Office was supposed to release the money to their underwriter, Niger Insurance Plc that would  pay the NIPOST Pension Board.

    He said the Board was aware of the debts.

    ‘’What we learnt is that the money budgeted for these arrears are still with the Budget Office and we do not know when it will be released,’’ he said.

  • Daniel urges NLC on 2014 Pension Reform Act

    Daniel urges NLC on 2014 Pension Reform Act

    The Pension Reform Act 2014 would remain a mirage unless efforts were made to educate workers on their rights by  labour unions, Commissioner for Insurance, National Insurance Commission (NAICOM), Fola Daniel, has said.

    He spoke at the Nigerian Labour Congress (NLC) Central Working Committee meeting in Enugu.

    He said proper enlightenment would ensure that workers were not shortchanged by employers who fail to comply with the Act.

    Highlighting the benefits of the Pension Reform Act 2014, as it relates to compulsory Group Life Insurance and Life Annuity for the employees by the employers of all tiers of government, and the private sector as contained in Section 4 subsections 5 and Section 7 subsections 1c, he said the purpose of the relevant sections referred to, is to ensure that employee dependents have succour in the event of death during employment and for comfort after retirement.

    He noted that the Act is an update of the Pension Reform Act of 2004.

    He said: “While this act of parliament provides for the security of employees, it would remain a mirage or paper tiger unless conscious efforts are made to enlighten workers of their rights by respective labour unions to ensure that workers are not shortchanged as a result of failure of employer to comply with the provision of the act.

    “At the moment, compliance is largely effected by the Federal government whilst other tiers of government are yet to fully comply.  Compliance by private sector employers will need to be monitored to ensure that workers interests are protected.

    He stated that the Commission has effective collaboration with the National Pension Commission (PenCom) in enforcing the relevant provisions of the Pension Reform Act, adding that the collaboration will continue.

    He urge the NLC to leverage on the provisions of the Act by ensuring that workers were sensitised to demand for their rights as provided and also ensure compliance by all tiers of government and the private sector employers.

    The proactivity of the NLC and its affiliates would enable workers to access the well-intended welfare provision for the workers, he said.

  • Pension assets hit N4.41tr

    Pension assets hit N4.41tr

    The pension fund assets under the management of the National Pension Commission (PenCom) hit N4.41 trillion as at last June.

    The figure was obtained by The Nation from the National Pension Commission (PenCom).

    In a report titled, ‘Summary of Pension Fund Assets as at June 31, 2014,’ PenCom stated that there  was a 2.04 per cent increase from the N4.32 trillion total assets recorded in May, this year.

    Of the amount, Pension Fund Administrators (PFAs) have invested N2.63 trillion in Federal Government Securities, accounting for 59.53 per cent of the total assets.

    A break down showed that N2.04 trillion was invested in FGN Bonds and N587.66 billion was committed to Treasury Bills.

    In the period under review, the PFAs, however, traded a volume of Domestic Ordinary Shares of N637.84 billion and Foreign Ordinary Shares of N55.86 billion.

    They bought State Government Securities of N187.55 billion and Corporate Debt Securities of N82.92 billion.

    They also invested N1.24 billion in Supra National Bonds, N527.42 in Local Money Market and N496, 000 in Foreign Money Market.

    Similarly, a total of N228.71 billion was invested in the Real Estate Properties accounting for 5.18 per cent of the total pension assets.

    They had a total of N46 billion in cash and other assets during the period under review.

    Meanwhile, the PFAs investment in May showed that total trade on FGN Securities was N2.59 trillion out of which N1.98 trillion was invested in FGN Bonds and N609.38 billion in Treasury Bills.

    Also in May, they invested N615.31 billion in Domestic Ordinary Shares, N54.82 billion in Foreign Ordinary Shares, N190.85 billion in State Government Securities, N78 billion in Corpoprate Debt Securities, N1.23 billion in Supra National Bonds, N496.25 billion Local Money Market and N813, 000 in Foreign Money Market Securities.

    The PFAs invested N228.33 billion in the real estate and N7.5 billion in Private Equities, with cash and other assets put at N42.99 billion.

  • Canada pension assets jump 20%

    The country’s largest pension plan is scouring the world for “diamonds in the rough” as high valuations make acquisitions difficult, Canada Pension Plan Investment Board Chief Executive Officer Mark Wiseman has said.

    According to Bloomberg, assets at the pension fund, which manages retirement money for 18 million Canadians, surged 20 percent to a record C$226.8 billion ($208 billion) in three months ended June 30, Canada Pension said in statement today.

    The report stated that Wiseman said access to cheap credit has created a situation where there is a lot of capital and liquidity in the market and that’s making it a “very difficult” time for a long-term investor like Canada Pension to find value.

    “What we’re doing is being very patient,” he said in an interview. “We’re looking for those diamonds in the rough, and tactically divesting certain non-core assets and that’s the right thing to do in a time like this.”

    Canada Pension’s announcement today had allocated an additional $500 million to its North American joint venture with Sydney-based Goodman Group (GMG) to acquire a portfolio of warehouse and logistics facilities in the U.S. fit that strategy, Wiseman said.

    “The diamonds in the rough for us tend to be those types of assets where it is a very large transaction, where there’s less competition, when there’s a degree of complexity associated with it,” he said.

     

    Remain Difficult

     

    Global mergers and acquisitions have accelerated in the first part of the year with almost $1.9 trillion worth of deals announced year to date, up 66 percent from a year ago, according to data compiled by Bloomberg. That level of activity has created a challenge for value investors like Canada Pension, Wiseman said.

    Finding acquisitions is expected to remain difficult until there is a shift in the monetary policies of central banks, he said.

    Canada Pension had yet to make a decision on whether it would sell its holdings in the expected initial public offerings later this year of Alibaba Group Holding Ltd. (BABA) or Calgary-based Seven Generations Energy Ltd.

    “We are always evaluating all of our assets at any time,” he said. “There is a price at which we are sellers, there’s a price at which we are a buyer.”

    Canada Pension reported gross investment return of 1.6 per cent for the three months ended June 30, according to the statement. That trails the three per cent median return in the comparable period of the C$520 billion universe of Canadian pension funds tracked by RBC Investor and Treasury Services, which reported its survey results.

  • PenCom grants police PFA final approval

    The National Pension Commission (PenCom) has granted the Nigeria Police Force (NPF) Pensions Limited, a Pension Fund Administrator, full approval to operate and manage pensions of its over 300, 000 officers and men.

    PenCom Head, Surveillance Department, YakubuDatti made this known to The Nation.

    He reiterated that the personnel of the Nigeria Police are still under the Contributory Pension Scheme (CPS) by virtue of Section 1 of the Pension Reform Act 2004 and as amended in the Pension Reform Act 2014.

    Head, Police Pension Department, Deputy Commissioner of Police, Ibrahim Mohammed, said the police pension PFA has started operations.

    He said the police agitated for their own PFA because they have had issues of Next-of-Kin (NOK) waiting for two to three years without getting their death benefits among others.

    He said: “Police can now take their own destiny into their hands. Issue of NOK without getting the death benefits of their loved ones  and other issues will be looked into. We know our problem’s peculiarity and how to attend to it.

    “We are excited that PenCom has granted the PFA license to operate because it will allow us to be able to deal with our pensions internally.”

    PenCom Acting Director-General, Mrs Chinelo Anohu-Amazu had earlier explained that the commission exercised its statutory powers and granted the NPF PFA approval-in-principle to allow the police establish their PFA to manage their pension assets.

    According to her, this is in line with the recommendations of the Oransanye Committee, which advised that with the exception of the military, which was granted exemption, no other Federal Government institution or force should be exempted from the scheme.

    She said the NPF Pensions was borne out of government’s refusal to allow members of the Nigeria Police pull out of the scheme and the directive that they remain in the CPS and seek administrative solutions to their grievances within the framework of the pension law.

    She said in compliance with this directive, police authorities incorporated a limited liability company, the NPF Pensions Limited, which has been licensed to operate as a PFA.

    She noted that in order to ensure smooth commencement of the NPF Pensions, the commission developed an operational framework that would guide the reassignment of Personal Identification Numbers and transfer of records of all the police contributors to the NPF Pensions Limited, which would be spread over an 18-month period.

    The Police have over N305 billion pension savings with existing PFAs out of the N4.3 trillion pension funds.

  • FRSC says pensions going smoothly

    FRSC says pensions going smoothly

    Pensioners of the Federal Road Safety Commission (FRSC) under the old pension scheme, the Pay As You Earn (PAYE) are being paid their pensions, gratuities and other benefit  as and when due, Deputy Corp Marshall, Admin and Human Resources, Chidi Nwachukwu, has said.

    Nwachukwu made this known to  The Nation while talking about the welfare of its pensioners. He said the Commission has produced 166 pensioners since its inception under the old pension scheme.

    He said: “The Commission adopts best practices in all of its action. We have a nominal roll of all our pensioners as obtained in some other agencies and parastatals of the government.

    “We have 166 pensioners and we do not have any arrears of gratuity and others, and our Board of Trustees meet quarterly.”

  • Middle-class workers should put pay rise into pension pots

    Workers should put any pay rise they get into their pension pots, a minister has said as official figures reveal that almost 12 million people are not saving enough.

    Half of all workers face a lower standard of living in old age because they are not contributing enough to their pensions, with those on middle and higher incomes among those contributing the least.

    According to the Department for Work and Pensions report, more than 6 million people who earn more than £32,000 will struggle in their retirement, including 1.1 million workers who earn over £52,000.

    Ministers are increasingly concerned that higher earners are failing to put money aside for their retirement after a series of policies intended to help those on lower earnings.

    A quarter of a million people earning more than £52,000 are saving less than half they amount they need to ensure they have an “adequate” level of income in their retirement.

    The report suggests that people should work longer to help ensure that they have enough to live on in their retirement.

    Writing in The Telegraph, Steve Webb, the pension’s minister, says that people need to take more “personal responsibility” and learn to “think about their prospects”.

    He added that as the economy recovers people should consider investing any pay rises they receive into their pension pots.

    He says: “Of course money is tight for many families, and no one can be blamed for prioritising today’s needs over future provision.

    “But it’s worth bearing in mind that a few extra pounds a week diverted to a pension scheme could make a world of difference to the retirement we can look forward to.

    “In most years, people who are in work will receive a pay rise. Even if that’s only a small amount of money, it might be that this could fund a little extra towards the workplace or private pension that’s going to fund a happier and more comfortable retirement.

    Mr Webb highlights how the government’s pension policies have helped lower earners. Under the government’s “triple lock guarantee”, the state pension rises every year in line with either earnings, prices or by 2.5 per cent whichever is highest.

    Ministers have also introduced an auto-enrolment policy which has seen almost 4 million people signed up to workplace pensions.

    However, Mr Webb warns that government policies alone will not be enough to give people a comfortable retirement.

    He says: “Clearly, there are tough questions here for future governments. But while the Government can do a lot, it can’t absolve people of all personal responsibility – and I make no apology for saying that it is incumbent on people to think about their own prospects too.

    “Everyone’s aspirations are different. Only an individual or couple can decide the sort of income they need, hope or expect to live on in retirement. But it’s a consideration everyone should make – and then look at what they can do to make it happen.”