The Nation Newspaper

Category: Pension

  • ‘Southwest retirees guaranteed good retirement’

    Workers and retirees in the Southwest geo-political zone are assured of a comfortable and rewarding life when they are no longer in paid employment going by their contribution under the Contributory Pension Scheme (CPS), the National Pension Commission (PenCom) has said.

    The six states in the zone are Lagos, Osun, Ogun, Ekiti, Ondo and Oyo. They are all at various stages of implementing the CPS with Lagos at the forefront, having contributed about N47 billion as at July last year.

    PenCom enjoined the Southsouth, Southeast, Northwest and Northeast zones in the country to emulate the Southwest by keying into the scheme to secure the future of their retirees.

    According to a report by the pension regulatory body, out of the 36 states in the country, 21 has enacted laws on the CPS while 14 others are at the stage of passing the bill into law.

    Adamawa State is however the only state that is yet to commence any action towards implementing the CPS, PenCom noted.

    While five of the Southwest states have enacted the laws domesticating the scheme, one of the states has a bill seeking to give the scheme legal teeth pening before the state legislature.

    Four out of the five states that have enacted their laws have made significant progress in the implementation of the CPS in their respective states, PenCom added.

    Acheivement by states

    Part of the achievements of the state is the setting up of structures in their respective states to supervise the administration of pensions and other benefits in both the states and local governments areas.

    Following the enactment of the CPS law by Lagos State in 2007, the Lagos State Pension Commission (LASPEC) was established. Osun enacted its law in August 2009 and established two distinct Bureaux namely; Bureau of Public Service Pension (BPSP) and the Bureau of Local Government Staff Pension (BLGSP). Ekiti enacted its law in January 2011 and established the Ekiti State Pension Commission (ESPC) while Oyo established the Oyo State Pension Commission (OSPC).

    Acting Director-General, PenCom, Mrs. Chinelo Anohu-Amazu in the report expressed satisfaction with the full implementation of the CPS in Lagos State.

    She said: “PenCom is impressed and would want the other zones in the country to emulate the Southwest by implementing the scheme. The level of implementation in the Southwest is quite encouraging.

    Lagos State

    While Lagos State has fully implemented the CPS, Osun State is in the process of achieving a full implementation status. Ekiti State has taken substantial steps but is yet to commence remittance of pension contributions. On the other hand, Oyo State only enacted law on the CPS while Ondo State is at the bill stage.

    Mrs Anohu-Amazu noted that in Lagos, a total of 45,730 employees have been registered as at 12 July 2013, while it has remitted a total sum of N46, 495,937,321 into its employees’ RSAs as at July 2013.

    Also, the state has consistently funded the accrued rights of its employees with an additional sinking fund for N100 million every month being invested and managed directly by LASPEC.

    She added that the state issued retirement bonds worth N18.9 billion to its retirees as at August 2013. These bonds were redeemed immediately and the proceeds paid into the employees individual RSAs.

    “As at August 2013, 2,242 employees from the state have retired under the CPS and are currently enjoying their pension. A total of 1,575 retirees are on programmed withdrawals while the remaining 667 of the retirees are assessing their pensions through annuities.

    “PenCom had also actively engaged the state throughout its implementation process and has provided the support and guidance required in resolving several implementation challenges”, she said. .

    Osun State

    Speaking on Osun State, She said: “The state has also made significant progress by registering 45,106 employees under the scheme and is remitting pension contributions on a monthly basis into the various RSAs of the employees. As at July 2013, a total sum of N4,150,907,363 had been remitted as pension contributions.

    “The BLGSP had carried out an Actuarial Valuation to determine the accrued rights of the serving employees while the BPSP was yet to carry out same for the State employees. A total sum of N803,384,604 had so far been remitted to the Retirement Benefits Bond Redemption Fund Account (RBBRFA) of the State Bureau while N1,093,175,030.35 had similarly been remitted into the RBBRFA of the Local Government Bureau. “

    To help the state resolve its implementation challenges, Mrs. Anohu-Amazu said, PenCom actively engaged it throughout by providing support and guidance required.

    “In April 2013, the Commission held a training workshop for the accounts and pension desk oficers in the state aimed at building the capacity of the participants on the operations of the CPS. The State had similarly commenced reaping the benefits of the CPS, having raised funds from the pension industry following the issuance of a letter of ‘No Objection’ by the Commission for PFAs to invest in the Osun State Development Bond 2012.

    “The major setback on implementation of the CPS in the State is the failure to renew the Group Life Insurance Policy for the employees in 2013 and failure to carry out actuarial valuation for the State employees to establish their accrued rights, despite the fact that it has only one year left before the employees start retiring under the CPS. The Commission conducted a maiden inspection of the two pension Bureaux in May and June 2013, respectively.

    Ekiti State

    Giving an account of Ekiti State, she said the State has so far registered 37,676 employees under the Scheme but is yet to commence remittance of pension contributions.

    She said: “The State had conducted an actuarial valuation and determined the pension liabilities of its employees under the old scheme, but is however yet to open an RBBRFA with the Central Bank of Nigeria or any of the PFAs for domiciling the funds meant to redeem the liabilities.

    “It also put in place a Group Life Insurance Policy for its employees. The Commission actively engaged the State in its implementation process and has provided the support and guidance required in resolving several implementation challenges. In April 2013, the Commission held a training workshop for the Pension Desk Officers and staff of the ESPC. The workshop was aimed at building the capacity of the participants on the operations of the CPS.

    Oyo State

    In the case of Oyo, she said the State enacted its law in January 2010.

    A copy of the law was received and reviewed by the Commission and its observations and comments were forwarded to the state for necessary action. The state is, however, yet to commence full implementation of the CPS.

    “In order to expedite the process of registering the State’s employees under the CPS, the State was advised to appoint PFAs and allocate MDAs and also give the Commission feedback in this regard. The Commission is, however, yet to receive any response from the state.

    Ondo State

    “Ondo State has only drafted a Bill on the CPS and copy of the Bill was reviewed by the commission and its observations and comments were forwarded to the state for incorporation before the law is enacted. The state is, however, yet to enact the law,” she said.

    Chairman, Pension Fund Operators Association of Nigeria (PenOp), MisbahuYola, said there is need for all states to comply with the scheme.

    According to him, the association is embarking on enlightenment campaigns and devising measures to get non-compliant states to key into the scheme.

    He added that the structures in place are safe and transparent from the regulator, to the administrator and the custodian.

  • PenCom returns N968m to military, SSS, others

    PenCom returns N968m to military, SSS, others

    The National Pension Commission (PenCom) has refunded about N968.9million to the military and paramilitary agencies being their members contribution under the pension scheme.

    The refund, which was paid in the second quarter of last year, represents receipts under the Contributory Pension Scheme (CPS). The repayment followed the withdrawal of the military and the other agencies from the CPS because of security lapses that resulted in the leakage of military personal data.

    PenCom’s Acting Director-General Mrs. Chinelo Anohu-Amazu made this known in a report tagged: “Update of the Refund of pension contributions of the military and security agencies,” obtained by The Nation.

    She explained that the refund constituted contributions made under the structure of CPS for the second batch of officers and men of the military and other security service agencies.

    The Pension Fund Administrators (PFAs) had sent reports to the Commission, affirming the disbursement of N4.5 billion to the accounts of 32,206 contributors under the first batch, adding that in continuation of the refund, the Military Pension Board, Department of State Services (DSS) and Defense Intelligence Agency (DIA) have made additional submissions for 18,924 Army personnel, 7,222 Navy personnel and 8,976 Air force personnel, which have been reviewed and are being processed for payment.

    In the report, Mrs. Anohu-Amazu said the first phase of the Parastatal Pensioners Verification Exercise (PPVE) has been concluded and a final report has also being forwarded to the Budget Office of the Federation.

    She explained that following the Central Bank of Nigeria’s (CBN’s) policy on the use of Nigeria Uniform Bank Account Number (NUBAN), the 144 organisations covered under the PPVE Phase 1, were requested to forward their NUBAN numbers of their pensioners captured during the exercise.

    An updated report is expected to be forwarded to the Office of the Accountant-General of the Federation after collecting the NUBAN numbers, she said.

    On the transfer of National Social Insurance Trust Fund (NSITF) contributions to members Retirement Savings Account (RSAs) holders, she said 13,921 requests were received for the transfer of NPF/NSITF contributions amounting to N820 million into contributors’ RSAs during the quarter under review.

    She said: “The Commission reviewed and approved the transfer of N723.5 million into the RSAs of 10,866 applicants.

    “The remaining 2,425 applications were rejected due to incomplete documentation, zero balances and duplicated applications.

    “As at the end of the second quarter, the sum of N8.01 billion has been transferred into the RSAs of 111,034 NPF/NSITF contributors.’’

  • Pensioners, workers’ benefits covered in Lagos budget

    Pensioners, workers’ benefits covered in Lagos budget

    Lagos State provided for pension payments and retirement benefits of workers in this year’s budget, the Commissioner for Establishments, Training and Pension, Mrs Florence Oguntuase, has said.

    She told reporters in Lagos that the budgetary provision would ensure that pensioners and workers did not suffer before they access their pensions. It will also ensure that the state did not default in payment.

    She said there are 34, 000 pensioners in the state, adding that all of them have been adequately provided for. She, however, said some parastatals that have not been able to present full documentation of their pensioners may have to wait a little more to get paid.

    She scolded the affected parastatals for not living up to expectations in terms of documentation, noting that the pre-retirement trainings and input by the Lagos State Pension Commission will end the problem.

    She urged would-be retirees to be prepared for retirement by been prudent in the management of their resources.

    “The budget that is being set aside consists of both the salaries of the workers as well as pensioners. We have made adequate provisions in the annual budget out of which we will pay salaries as well as pension.

    “Over all we have about 34,000 pensioners throughout the state and all of them have been adequately provided for. Before now, Lagos State has never defaulted in paying its workers’ salaries, or pensions and we will never default,” she said.

    The Lagos State House of Assembly approved a budget of N489. 690 billion for the 2014 fiscal year out of which N234.6 billion is for recurrent expenditure.

  • Obama offers retirement savings plan for workers

    President Barack Obama offered more Americans the chance to save for retirement through payroll deductions with a plan for new government-sponsored savings accounts.

    The accounts, which Obama announced in a State of the Union Address that concentrated on expanding economic opportunity, will be available to workers who don’t have access to a 401(k) plan, administration officials said.

    The “MyRA” accounts, similar to an individual retirement account, will provide “a new way for working Americans to start their own retirement savings,” Obama said in the text of the speech released by the White House.

    Under the initiative, workers would be allowed to have a portion of their pay deducted for deposit into an account invested in U.S. government bonds that would be treated for tax purposes as an individual retirement account, administration officials said.

    The accounts, set up through the Treasury Department, would have a maximum balance after which money would have to be rolled over into an IRA, the officials said.

    The officials project that millions of Americans will take advantage of the savings accounts.

    “This isn’t earth-shattering stuff,” said Brian Graff, the chief executive officer of the American Society of Pension Professionals & Actuaries. “But it is a step in the right direction to get more people saving for retirement, which I would think is a bipartisan issue.”

    Existing authority

    Obama can establish the savings program under existing executive authority without new legislation, the officials said. He will announce details of the plan tomorrow.

    “I don’t expect this to get a lot of pushback,” said Graff, who discussed the proposal in advance with Treasury officials. He said it draws on an existing program that permits workers to purchase U.S. savings bonds through payroll deductions and adds “a retirement twist.”

    The proposal resembles an earlier Obama administration plan that would have required employers to offer an automatic IRA option to employees. That plan, which was included in Obama’s 2014 budget, would have cost the government an estimated $17.6 billion in foregone revenue over 10 years.

    About 68 percent of U.S. workers had access to retirement benefits as of March, last year, with 54 percent participating, according to the Bureau of Labor Statistics.

    Company reaction

    “Although we don’t have the details yet, Vanguard is generally supportive of expanding savings opportunities for those not covered by a workplace retirement plan,” Linda Wolohan, a spokeswoman for Vanguard Group Inc., said in an e-mail.

    Wolohan declined to comment further before hearing the specifics of Obama’s proposal. Vanguard was the second-largest manager of 401(k)-type assets in 2012 behind Fidelity Investments, according to researcher Cerulli Associates.

    Fidelity, which is also the largest provider of IRAs, declined to comment before hearing the speech, according to an e-mail from spokeswoman Eileen O’Connor.

  • How transfer window will aid service, by pension manager

    How transfer window will aid service, by pension manager

    The availability of transfer window by the National Pension Commission (PenCom) will enable pension managers grow their clientele and offer better services to workers and retirees in the country.

    Managing Director, AIICO Pensions Manager, Mr Lounge Eguarekhide, who made this known in Lagos, said most of the initial pension accounts were government accounts that were taken over by companies licensed shortly after the take-off of the Pension Reform Act, 2004.

    He described as strange the ranking of firms by PenCom as they were being licensed. He said: “I think that this is really a function of the fact that the largest employer of labour is government and most of the initial pension accounts were government accounts. If you have a large chunk of the public sector account and there is no opportunity like the one the transfer window will offer, your remittances will grow by the amount you get from the public sector.

    “The implication is that the firms that were licensed later will have a smaller share of the public sector account and in my view, that is what is responsible for the ranking in the industry currently. Some of these companies have however been able to achieve growth in the private sector.”

    He said despite this challenge, AIICO has remained a keen competitor in the new pension industry, adding that the company received its license to participate in the industry in the third batch of licensees.

    “AIICO Pensions has more than 67 per cent of its contributors based in the private sector, which is rare in the industry, adding that the company has continued to provide quality service to its retirees.

    He said the ‘Live Smart Programme,’ is a medium employed by the firm to engage its customers. “It is not just about collecting their money and managing it, but it’s about helping them live a full and decent life. We counsel and advise them on how they can develop the habit that will enable them live a full and smart life.

    “For instance, we get mostly health experts who run basic health checks like blood pressure and blood sugar. We give them some tutoring on how to live a healthy life and what to check. There is also some discussion on financial planning and various financial tips on how to carry on after they leave active service.

    ‘’We have at least one retiree’s forum once every two years, but we plan to have minimum of two every year in the 28 locations that we exist in the country so that we can cover our entire retiree’s base.’’

  • Pension charges cap shelved until 2015

    Pensions Minister, Steve Webb supported the plan, which capped charges above 0.75pc, as it would protect millions of people from high fees after they were automatically enrolled in their company’s pension scheme.

    The introduction of the cap has now been pushed back from April until next year at the earliest, the Financial Times claimed.

    Last October, Mr Webb vowed to crack down on pension scheme charges, pointing to a report by the Office of Fair Trading “identifying no fewer than 18 different sorts of charges which can be taken from people’s pensions”.

    He told The Telegraph: “For too long, private pension savers have been at the mercy of their pension provider. Apparently ‘low’ charges such as 1pc per year can mount up to a huge sum over the course of a working life.”

    The Department for Work and Pensions found that just 24pc of people in their 20s were saving into a company pension before the Government started automatically enrolling workers in 2012.

    Government believed plan to cap charges above 0.75pc would protect millions of workers from high fees.

  • Traders, artisans, others still averse to insurance

    SOME Nigerians’ attitude to insurance seems not to be changing.

    Some traders, artisans and organisations that spoke with The Nation said they do not understand what benefit taking an insurance policy will provide for them.

    A motor spare parts retailer, Benjamin Oladele, said he had no cover on his wares because it is a waste of money to buy insurance.

    He said: “Why would I buy insurance when they find it difficult to pay claims as at when due. They bring minor excuses to cover up and at the end, they all go free. I don’t think I want to risk that.”

    A banker, Mrs. Adeboyega, said initially, she had a comprehensive insurance cover on her car but did not renew it after paying premium several times and receiving nothing in return.

    Another businessman on Lagos Islandwho identified himself simply as Emeka, said he believes insurance is just a trick deplored to collect money from people.

    In spite of the negative opinions held by Emeka and others about insurance, some people still see insurance as a blessing.

    Mr. Goodness Johnson, who owns a furniture store, said insurance has been a blessing to him as he has benefitted from it.

    He urged Nigerians to embrace insurance through taking covers. “Insurance is no threat to us. It was established to serve us. It brings relief when something unexpected occurs. I can proudly tell anyone that all my properties are insured,” he said.

    Oladimeji Babalola, an accountant, said Nigerians should see insurance as a priority.

    The industry has made things easier by organising micro-insurance for the low-income earners, he said.

    Mrs. Funmi Aderibigbe, a business woman, added that insurance has made positive impact in developed countries and Nigeria should not be an exception.

    She said: ”I have life insurance and other policies and I do not see why people should still claim ignorance of insurance. The insurance companies that I have had encounter with have improved over the years and so is the industry generally. It is no longer difficult to have access to genuine insurance. With a click on your mobile phone, you can easily get insured.”

  • Retirees urge Lagos on N4b pension arrears

    Lagos State pensioners under the old scheme, ‘Pay As You Go’, have appealed to the Lagos State Governor, Babatunde Fashola to pay pensioners their outstanding pension arrears of about N4 billion accumulated since the administration of former President Olusegun Obasanjo.

    Chairman, Association of Retirees, Lagos, Chief Rasheed Olu-Ajayi, said the money accumulated following the 142 per cent increment was approved by 2000.

    Olu-Ajayi, however said Governor Fashola has paid 36 months, amounting to N5.6 million about four years ago, adding that there has been an increase of 15 per cent, six per cent and 33 per cent after the Obasanjo’s administration.

    He said the retirees under the scheme include 12,000 local government employees, about 8,000 teachers from the teaching services, civil services and other parastatals.

    He lamented that pensioners are dying every day wondering con if the remaining pensioners will ever live to enjoy the benefits before they pass on.

    He commended the governor for regular payment of monthly pension.

    He said: “Other state governors that came on board now have been settling some of their arrears although they have limited number of pensioners. I cannot just challenge without thanking the governor for the monthly payments because without the monthly payment over the years, things would have been worse for us.

    “We have made our pleas that our arrears be paid and we have even gone spiritual. We have threatened but what can we do? We cannot go on strike. It would be the worst for us. We are just pleading with the state government and we are hoping that Governor Fashola will pay us as part of his parting gift to us.

    “There are some of us who are over 80 years old now. They are still attending meetings to see when they are going to get their fund.”

  • Tesco Pension Fund hires Aerion’s Brickman for credit portfolio

    Tesco Pension Investment Ltd., which manages the pension fund of the biggest United Kingdom’s retailer, said it hired David Brickman as senior credit portfolio manager.

    Brickman, who joined the unit in December, was previously head of credit at Aerion Fund Management Ltd. Jon Cunliffe heads the fixed income team at Tesco Pension Investment and Steven Daniels is chief investment officer.

    Tesco said in May 2012 that it was creating an investment team to manage the company’s pension fund, which has more than six billion pounds ($9.9 billion) in assets, to reduce costs and increase net returns. The retailer manages one of the U.K.’s largest defined benefit pension plans, covering more than 170,000 of its 416,000 employees, according to the Cheshunt, England-based company.

    Tesco’s pension deficit increased to 2.4 billion pounds from 1.8 billion pounds at the end of 2012 because of falling corporate bond yields, the company said in its interim management statement published in October. It said the shortfall was “partly offset” by higher-than-expected asset returns over the period.

    Brickman was head of European credit strategy at Lehman Brothers Holdings Inc. until May 2008. The bank collapsed in September that year, triggering a global financial crisis.

    • Culled from Bloomberg

  • Premium Pension strategises

    Chairman, Premium Pension Limited, Mallam Aliyu Dikko has said the company grew its balance sheet from N52.3 billion in 2008 to N325.7 billion in 2013.

    Dikko, who made this known this in Abuja said competition in the pension industry was becoming stiffer and the environment throwing up tasking challenges.

    He said this had made it imperative for the company to consolidate on its zero tolerance for non-compliance and further sharpen the risk management policy and best practices in internal control processes and procedures.

    He added that the actual assets under management surpassed the 2008 strategic plan projections for four of the five years while performance over budget ranged from a low of N276 million to a high of N19.7 billion.

    He said: “The board and management of Premium Pension in the country met last weekend to draw up strategies to consolidate gains and move the company in tandem with the anticipated growth in the industry in the next five years.

    “The company was established in July, 2005 to achieve superior customer satisfaction in active and retirement life through best practices defined and driven by our core values of care, integrity, transparency, ethics and professionalism.

    “Our performances to date when placed in juxtaposition with the strategy we developed in 2008 reveals a mixed bag of areas where the benchmark were not attained and areas where targets were exceeded.

    “This strategy defining exercise has the principal objective of leading us to our set vision and mission through defining ways of developing a strong investment management policy with state of the arts investment management tools that will produce superior returns for our clients.”