The Nation Newspaper

Category: Pension

  • Pushing technological advancements in insurance

    Pushing technological advancements in insurance

    The insurance industry has been slow in the adoption of digital technology. OMOBOLA OLU-KUSIMO writes that this is changing as the National Insurance Commission (NAICOM) is pushing for the use of Artificial Intelligence (AI), among others, to transform the industry.

    The insurance industry is lagging behind in digital technology such as blockchain, Artificial Intelligence, and mobile platforms that can revolutionise the sector.

    Digital technology has taken the world by storm affecting, changing and improving the way things are done. It is disrupting traditional structures and industries such as telecoms, media, and entertainment; and consumer products have been impacted to attract and retain customers.

    Operators were put on their toes to reassess their business model, re-evaluate their strategy and make the digital agenda a high priority.

    The National Insurance Commission (NAICOM) believes that if this is not done, it will be difficult for the operators to deliver on customers’ expectations.

    This is not to say that NAICOM did not brace itself in the adoption of changes. It has and has been working assiduously to put the industry at par with others and deepen insurance penetration.

    Insurance penetration is a measure of the contribution of insurance to the Gross Domestic Product (GDP). It is calculated as the ratio of total insurance premium to gross domestic product in a year.

    It is also an indicator of the development of a sector within a country and how much it contributes to the national economy.

    However, it does not indicate how many people have coverage, its quality and the value it provides for  consumers.

    According to NAICOM, in the past six years the insurance penetration rate has been as follows:  0.48 per cent in 2016, 0.54 per cent in 2017; 0.61 per cent in 2018; 0.71 per cent in 2019; 0.72 per cent in 2020; and 0.88 per cent in 2021.

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    Further analyses show that an estimated three per cent of adults are covered by insurance.

    Experts have, however, decried the low Insurance penetration, saying it can be increased through the adoption of technology and digital solutions.

    Commissioner for Insurance, Mr. Olusegun Ayo Omosehin has, however, been fostering technological advancements, such as blockchain, AI, and other mobile platforms.

    On his strategies to deepen penetration and transform the industry through technology, Omosehin said it is high time insurers evolved and responded.

    He said this would require various skills, culture and model.

    Few weeks ago, the Commissioner had, during a visit to the Inspector-General of Police, Kayode Adeolu Egbetokun, at Louis Edet House, Force Headquarters, Abuja woed the police to collaborate with them to enforce compulsory insurance with technology.

    He emphasised that it is unlawful for individuals to drive on the road without valid motor insurance which is Third Party Motor Insurance.

    He noted that less than a quarter of the vehicles have valid motor insurance and underscored the need for digitisation platforms to authenticate the validity of vehicle insurance.

    He mentioned that this system is being implemented by the Lagos State Government.

    He requested the establishment of a team to collaborate with the Commission in conducting enforcement, asserting that the success of this initiative would be significant.

    In response, the IGP assured the commissioner of the Police’s support. He announced that a team, headed by the DIG Operations, would be set up to handle the matter.

    Also, at the Annual Industry Conference, themed “Actuaries and AI: Strengths, Opportunities, Weaknesses, and Threats”, Omosehin reiterated that the world is experiencing a significant transformation, driven by technologicy and data revolution.

    “The financial sector, in particular, is at the point of a significant shift, with Artificial Intelligence (AI) poised to revolutionise the way we conduct business. As the Nigerian insurance industry continues to evolve, the intersection of actuarial science and AI presents a unique opportunity to further utilise the power of technology to shape the future of insurance in Nigeria. Today, actuaries play a critical role in risk assessment, pricing, and financial stability using advanced techniques such as data science and predictive analytics to analyse complex data and make informed decisions. The profession has become increasingly important in a data-driven world, with actuaries in high demand across various economic sectors.

    “One of the things that some older actuaries talk about is the time before spreadsheets existed, when calculations were done by hand. The advent of spreadsheets did not eliminate actuaries; rather, it allowed them to do more and explore new aspects of their work. AI may represent another major leap forward, but it is very unlikely to replace actuaries. It is therefore exciting to witness conversations around AI especially since the release of Chat-GPT in 2022 which was followed by other AI Chatbots and other technologies to integrate these advancements to improve operational efficiency.

    “It is in recognition of these developments that the Federal Government of Nigeria plans to position Nigeria as the AI hub for AI solutions in Africa. This is to be achieved through the development and implementation of a National Artificial Intelligence Strategy aimed at accelerating AI adoption. It is thus important that the insurance industry and, by extension, actuaries are at the forefront of its adoption.  In conformity with the above, the Commission is committed to the Federal Government’s strategy.  We will ensure that our sectoral regulatory policies are consistent with the outlined goals of the Federal Government while enhancing the stability of the insurance industry”.

    He continued: “Even though, there are perceptions that disruptive technologies like AI will replace every job and make a lot of skills obsolete. There may be credence to this sentiment, if like actuaries, we are to observe historical patterns. However, technological advances have always changed the landscape regarding jobs and relevant skill-sets. Like other technological disruptors, AI has the potential to transform the insurance industry and by extension the actuarial profession. The pace at which AI is evolving means that actuaries have to also continuously evolve and develop skill sets that utilize AI and other machine learning tools or risk being left behind.The Nigerian Actuarial Society (NAS) has a vital role to play in equipping its members with access to the necessary skills to navigate the world of AI. This is why I am inclined to believe that this is one of the reasons we are having this conference.

    “In the changing landscape, using AI for vast data analysis will be commonplace.This will enable actuaries delve deeper into large data; uncovering insights, and developing more accurate risk pricing models and innovative insurance products for the Nigerian populace. AI would readily be instrumental in the emerging Insurtech landscape and financial inclusion by enabling the development of microinsurance solutions that cater to the underserved population, Insurtech AI underwriting, etc. Accordingly, as an insurance industry regulator, we believe that this is the time to strengthen our collaborative efforts to ensure responsible AI adoption in order to maximise the strength and opportunities of Actuaries and AI.”

    Omoseyin enjoined actuaries to be open to ingenuities as well as harness the true potential of AI in the   industry.

    To this extent, he stated that the mutual collaboration between NAICOM and actuaries seek to consider regulation and governance, collaboration, and up-skilling and reskilling.

    He maintained that the Commission is concerned about the inadequate professionally qualified actuaries in the industry and is committed to supporting initiatives and developments that are likely to facilitate actuarial capacity development or enable the industry to access qualified actuaries.

    “This is part of the reasons we, at the Commission, are excited about the prospects that AI brings to the actuarial profession and by embracing the strengths and opportunities of AI while addressing its weaknesses and threats, we can navigate this new landscape with confidence and foresight,’

    The commissioner called on actuaries to collaborate, innovate, and lead the way in shaping the future to facilitate the enthronement of a more sustainable and inclusive insurance ecosystem that benefits stakeholders.

    Managing Director, Rex Insurance Limited, Mrs. Ebelechukwu Nwachukwu, during the inauguration of a new head office of the organisation and brand relaunch spoke on how the company has embraced digitalisation.

    Mrs. Nwachukwu said: “In today’s rapidly evolving digital landscape, staying ahead requires continuous adaptation and innovation. Our new head office is a testament to our commitment to digitalisation. We have integrated the latest technologies to enhance our operational efficiency, improve communication, and deliver superior customer experiences.

    “From advanced data analytics to seamless digital platforms, we are embracing the future and ensuring that our services remain accessible, efficient, and user-friendly. Our recently redesigned website has a more user-friendly user interface to aid navigation by visitors to the site. A new mobile app has been developed with the aim of giving users 24-7 access to our product and services and are available on the IOS and Google play stores.These are some of the changes we have made,” she added.

    Also, Group Managing Director, Consolidated Hallmark Holdings (CHH) Plc, Mr. Eddie Efekoha. said the group has embraced digital technology in line with global trends.

    He said the use of technology remains pivotal in their quest to consolidate their operations as one of the top players in the financial services sector.

  • NAICOM orders African Alliance to settle annuity payment, claims

    NAICOM orders African Alliance to settle annuity payment, claims

    The new Commissioner for Insurance, National Insurance Commission (NAICOM), Mr. Olusegun Omosehin, has given marching orders to the company to resolve and ensure settlement of outstanding claims.

     This complaints by annuitants and insurance claimants against African Alliance Insurance Plc for either delaying or failing to fulfill its obligations.

    The Commissioner summoned the Board of African Alliance Insurance Plc to its headquarters in Abuja where he ordered the company to settle outstanding payments due to annuitants and claimants or face the wrath of the law.

    Read Also: NAICOM restructures to enhance operations

    In addition, he directed the Board to submit a plan for addressing the challenges faced by the company which necessitated putting the company under the Commission’s Regulatory Order.

    He warned that given the challenges, the company should expect further actions if they fail to address the issues within the stipulated timeline .

    He restated the Commission’s determination to ensure fair treatment of stakeholders, enforce professionalism and good conduct among its licensed operators.

  • Pensioners to back PTAD at Ad-Hoc Committee on MDA restructuring today

    Pensioners to back PTAD at Ad-Hoc Committee on MDA restructuring today

    The Nigeria Union of Pensioners (NUP) will today defend the existence of PTAD before the House of Representatives Special Ad-hoc Committee on the Restructuring of Federal Government Parastatals, Commission and Agencies at a public hearing at the green chamber.

     They said they would appeal to the Federal Government to spare PTAD from being scrapped, merged or subsumed under any ministry, adding that the development is retrogressive and counter-productive.

    Rather, they advise that PTAD should be encouraged to stay and build on its ongoing “I am Alive” innovation and scientific approach towards stabilising and regularising pension payment to the advantage and benefit of the pensioners.

    NUP President, Godwin Abumisi represented by the National Vice President, Asen Sambe, submitted that it behoves them to lend their voice to the discourse. He affirmed that as senior citizens who have seen it, the implementation of the long-awaited Orosanye Report would go a long way in sanitising our public/civil service system by minimising wastages as well as addressing the issue of duplication of government agencies and departments with overlapping functions.

    He said: “Given the above, while the Nigeria Union of Pensioners is not in any way opposed to the restructuring saga, in as much it does not lead to job losses of workers, we are here to make a case for our members under the Defined Benefit Scheme (DBS) who are going to be either positively or negatively affected by the implementation of this report.

    “Therefore, we are not only worried but apprehensive of this development as the sledgehammer may or not affect PTAD, the only agency responsible for the welfare and well-being of our members. PTAD as we all know is the legally-recognised body that pays the gratuity, monthly pensions and other retirement benefits of our members.

    “Please, permit us to take you down the memory lane. The Pension Transitional Arrangement Directorate (PTAD) was established via an Act of parliament for addressing pension challenges facing the Federal Civil Service pensioners who then accessed their pensions through the Office of the Head of Civil Service of the Federation (OHCS).

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    “During this era when pension payments were domiciled at the Office of the Head of Civil Service of the Federation, federal pensioners were subjected to dehumanisation and frustrations as manifested in the endless verification with little or no tangible results.

    “To cap it all and, sadly too, this was the period we had cases of pensioners travelling long distances to Abuja for endless verifications as such exercises were centralised in Abuja. Many pensioners in the process of travelling to Abuja to complv and meet up with the exercise were involved in accidents on their way, with some collapsing/slumping on the not well-organised exercises while waiting for their turn on the long queues to be verified, resulting to untimely death of many pensioners.

    “The period also witnessed unprecedented delay in the payment of monthly pensions, removal of thousands of names of genuine pensioners from the Federal pension payroll, fraudulent payment alerts, many cases of under/short payments. That is not all, during this period, there were sharp practices by the power racket around the Pension Department of the OHCSF which had cost the Federal Government billions of naira, and which by extension had brought untold hardship, pains and frustrations upon the pensioners”.

    Sambe further stated that it was this corruption that gave birth to the establishment and transfer of pension matters and administration to PTAD in 2013. “Therefore, as partners in progress and close watchers of the activities of the new Directorate for Federal Pensioners, we can proudly beat our chests and say without fear of contradiction that TAD has over the years comparatively done well and recorded commendable successes, and indeed rekindled the hope of the hitherto hopeless pensioners in their seamless efforts to make life better for the vulnerable pensioners.

    “Therefore, given the above scenario, it would amount to returning to the “Dark Days” of agony and pains if PTAD is allowed to undergo this surgical operation of being scrapped or merged with any parent ministry for supervision with no defined clear-cut objective or directions.

    “As Nigerian pensioners, we crave your indulgence to permit us to state for emphasis that the Nigeria Union of Pensioners (NUP) is the umbrella body as well as the voice for all civil and para-military pensioners in Nigeria. In other words, NUP is the only union recognised by the law of the land for Nigeria pensioners. Members of the Union who retired from service before the introduction and implementation of the Contributory Pension Scheme (PS) draw their monthly pension and other entitlements under the old Defined benefits Scheme (DBS) under the full supervision of PTAD.

    “As the Committee on the review of the Orosanye report on the restructuring of Federal Government Agencies, Departments and Commissions winds up its assignment, the Union wishes to crave the indulgence of the House of Representatives Special Ad-hoc Committee on Restructuring of Federal Government agencies, parastatals and commissions, on whose instance this public hearing is organised, to spare TAD from the sledgehammer of the restructuring to save the Defined Benefit Scheme pensioners from going back to the horrible nightmare of the old order of oppression, depression and hopelessness.

    “On the other hand, and better still, if PTAD cannot skip or escape the scrapping or the merger, we are of the strong opinion that the best place to merge it with for safe landing is the National Pension Commission (Pencom), which we so much believe and trust that it has the manpower, the technical-know how and the capacity to absorb it for effective management. A stitch in time saves nine.”

     He commended the Committee for organising the  hearing.

  • NEM grows revenue to N52.1b

    NEM grows revenue to N52.1b

    • To set up Life Insurance

    NEM Insurance has grown its revenue from N31.4 billion in 2022 to N52.1billion in 2023, representing an increase of 66 per cent.

    Its Group Chairman, Mr. Tope Smart, made this known at the company’s 54th Annual General Meeting (AGM) in Lagos.

    He reiterated that, as part of its expansion, the plan to set up a viable life assurance company was in progress.

    He noted that on the investment income, an increase of 106 per cent was achieved relative to 2022.

    He informed the shareholders that the Board had allotted a dividend of 60 kobo per N1 ordinary shares amounting to N3 billion to them.

    He added that the total investment income in 2022 was N1.6 billion while that of last year was N3.3 billion, adding that the claims paid during the year was N15.7 billion as against N12.3 billion in 2022; an increase of 28 per cent over that of the preceding year.

    He said: “The claims ratio for 2023 was 30 per cent while that of 2022 was 40 per cent, a decrease of 25 per cent.’’

    Smart also said the management expenses increased from N3.7 billion in 2022 to N5.3 billion in 2023, 43 per cent, stressing that the increase was due to the impact of inflation and business growth during the year under review.

    On guidelines and standard implementation, he submitted that as part of global business ethics, standards and best practices would continue to evolve, adding that insurance companies are transiting to the International Financial Reporting Standard (IFRS) principles for reporting insurance contracts.

    He said the adoption of IFRS 17 was part of measures to improve reporting practices, transparency, comparability, and disclosures in line with international best practices.

    IFRS 17 is effective for the annual reporting period beginning from 1st January 1, 2023, he added

    “NEM Insurance Plc is a leading insurance provider in Nigeria, offering all forms of general insurance products with a history of successful financial reporting under previous accounting

    standards, the company realized the importance of embracing IFRS 17 as well as the directives from regulatory authorities and adopted IFRS 17 in presenting its 2023 financials.

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    “This required significant changes to the actuarial models, processes and accounting treatment which was quite tasking, time-consuming and resource intensive.

    “As part of regulatory compliance also, we have complied with the Securities and Exchange Commission’s directive on Internal Control Over Financial Reporting (ICFR).Profit for the year,” he further said.

    The NEM Group chairman maintained that the group’s Profit Before Tax (PBT) for the year under review was N18.9 billion and N5.5 billion in 2023 and 2022, an increase of 244 per cent.

    The parent company’s PBT was N19.2 billion for 2023 and N5.5 billion for 2022, an increase of 249 per cent, he stated.

  • PenCom enhances voluntary contribution processes

    PenCom enhances voluntary contribution processes

    The National Pension Commission (PenCom) has enhanced the processes of Voluntary Contribution (VC) to improve the Contributory Pension Scheme (CPS).

    This, PenCom said, was in response to the Licensed Pension Fund Operators (LPFOs) to address concerns raised by contributors and retirees on the voluntary contributions.

    Consequently, the enhancement has reduced retention period, achieved uniform withdrawal rules and addressed tax deductions.

    This was made known in a statement by the Commission, which said, the Pension Reform Act (PRA) 2014, in sections 4 (3) and 4 (7), allows an employee to make voluntary contributions to his Retirement Savings Account (RSA) in addition to the mandatory monthly contributions.

    Speaking on the Background and Objectives of the Revision, the Director-General, PenCom, Mrs Aisha Dahir-Umar, emphasised that a VC is a non-mandatory contribution remitted into an employee’s RSA through the employer to bolster retirement benefits.

    She said it allows employees to make additional contributions beyond the legal mandatory contributions, minimum of 10 per cent by employer and eight per cent by the employees.

    She said: “In 2018, PenCom issued the Guidelines on Voluntary Contribution to establish uniform rules, provide withdrawal procedures, enhance future retirement benefits, and assist various categories of retirees and contributors.

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    “However, in the course of implementation, some issues were identified. Key concerns included the two-year retention rule for 50 per cent of voluntary contributions and variations in withdrawal criteria for different contributor categories. Additionally, there were some issues regarding tax deductions on voluntary contributions,” she noted.

    Reduced retention period

    The DG said mandatory and non-mandatory contributors can access the 50 per cent contingent portion of their voluntary contributions after one year, a reduction from the previous two-year requirement.

    She said the change aims to provide speedy access to funds to meet personal needs, which often arise.

    “Previously, Active/Mandatory contributors can only make withdrawals from their VC after the contributions have been retained in their Retirement Savings Account for a minimum of two years.

    “Non-mandatory contributors, such as retirees, exempted contributors, political office holders, employees in an organisation with an Approved Existing Scheme (AES), and foreigners can access their VC upon the expiration or termination of their contract.

    “VCs can now be withdrawn after one year from the date of contribution for both mandatory and non-mandatory contributors,” he said.

    Uniform withdrawal rules

    On uniformed withdrawal rules, Mrs Dahir-Umar said retirees, exempted contributors, political office holders, employees in organisations with an AES, and foreigners are permitted to withdraw 50 per cent of their voluntary contributions before the expiration of their employment or contract.This provision seeks to eliminate withdrawal variations in the previous guidelines.

    “Prior to the circular, VC for retirees, exempted contributors, political office holders, employees in an organisation with an AES, and foreigners, were retained in the RSA to be accessed at the expiration or termination of their contract employment.

    “In the new requirement, non-mandatory contributors can access 50 per cent of their VC as contingent withdrawals before their employment/contract expires”.

    Tax deductions

    She added that in line with Section 10 (4) of the PRA 2014, any income accrued on voluntary contributions are taxable according to relevant tax laws if the withdrawal is made before five years from the date of contribution.

    This clarification she said ensures consistency with the Act and addresses concerns raised by stakeholders.

    “Previously, tax deductions for mandatory contributors were only made on the income earned when withdrawal is within five years from the date of contribution.Therefore, tax deductions for non-mandatory contributors were applied on both the income earned and principal amount when withdrawal was within five years from the date of contribution,” she said.

    Implementation and compliance

    She further said PenCom has issued a circular to LPFOs for implementation.

    She stressed that PFAs are required to comply with these directives and submit documents to PenCom for processing contingent withdrawals.

    She submitted that the circular would address contributors’ concerns and enhance the scheme’s attractiveness.

    “By reducing the retention period, allowing uniform withdrawal access, and aligning tax deductions with the PRA 2014, PenCom aims to foster increased participation and sustainability of the CPS.These changes reflect PenCom’s commitment to continuous improvement and responsiveness to stakeholders’ needs,” she added.

  • Lagos to clear pension backlog Thursday

    Lagos to clear pension backlog Thursday

    The Lagos State Pension Commission is set to pay the last batch of the outstanding backlogs of Accrued Pension Right to retirees of the Lagos State Civil Service, the Director-General, Mr. Babalola Obilana, has said.

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    Obilana, in a statement, said the backlog would be cleared at the upcoming 105th Bond Certificate Presentation schedule for July 4, 2024.

    He said the significant event would echo the remarkable testament of Governor Babajide Sanwo-Olu’s commitment to the welfare and well-being of our senior citizens.

  • Pension complaints and solutions

    Pension complaints and solutions

    IKPI: Good day, I am an annuity police retiree with African Alliance Insurance Plc. I have been receiving my monthly annuity since 2015 but I am yet to receive it in the past three months. The company did not pay me and did not give me any explanation to that effect. I want to know what is happening at PenCom. I need my money to assuage my sufferings.
    ALIYU: Good day, I retired from NDA Kaduna on March 19, 2023. My PFA is Premium Pension Limited. I have been waiting for my pension benefits since then but I haven’t received anything. My family and I have been suffering alot. I don’t have money to pay house rent, feeding, school fees, healthcare, among others. Kindly help me.
    ODUNSI: Hello Omobola, the saviour of pensioners. My name is Odunsi. I complained about African Alliance Insurance not paying my February and March annuities insurance scheme. Due to your intervention, they paid me in April. But they have refused to pay again as I am yet to receive May and June payment. I am speaking on behalf of many pensioners with the African Alliance. We want to know whether the company is going bankrupt. We rely on these peanuts paid as monthly pension to survive. Presently, it is becoming a nightmare to get peanuts. Thanking you in anticipation for your swift intervention once again.
    IORLIAM: My name is Iorliam. I submitted my annuity transfer letter to NPF Pension on June 10, 2024. But up till now, they have not done the transfer. Please help to get an NPF Pension to transfer my money to my chosen insurance company. I did not receive my monthly pension because of this.
    OLABISI: Hello, you requested for my PEN number, name and PFA and I have provided it. I have also submitted my application. But, I am yet to be paid 25 per cent for loss of job.
    PENCOM: Dear Mr Olabisi, please contact your PFA to direct you on the next steps as the application is incomplete.
    ANIEMA: Hello, my late mum’s pension fund has not been paid since she passed in 2019. Her name is Aniema. Until her untimely death, she worked at Federal Science and Technical College (FSTC), Uyo, Akwa Ibom State. Her daughter, who is the next of kin, is Favour. I have submitted all the necessary documents to Stanbic IBTC Pension. Kindly assist us so that favour can start university and her younger siblings too.
    PENCOM: Dear Sir, the death benefit has been processed/paid in July 2023. The named beneficiary is advised to contact PFA.

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    ABUBAKAR: My name is Abubakar from Ilorin. I worked at the Nigerian branch of Danish Yoghout Company, FANMILK PLC, for 31 years. It was the illness brought on by my workplace accident that made them lay me off without compensation. I beg to use this forum to appeal to the CSR conscience of FANMILK PLC and the embassy of Denmark. Thank you.
    PENCOM: Not under our Purview, NSITF
    FOLORUNSO: My name is Folorunso. I worked with Vanguard Newspaper and later joined The Nigerian Tribune. On joining Tribune, Stanbic IBTC Pension opened a new RSA account for me, the same Stanbic with Vanguard. I now have double PEN registration and I am having difficulties in accessing my funds. For over a year, I have kept writing STANBIC and the DG of PenCom but to no avail. After much pressure, STANBIC claimed to have harmonised the two PEN account numbers and it is left for PenCom in Abuja to give approval for me to access my funds. My findings show that it will take another one year to get PENCOM approval. Please, what can I do to get the urgent attention of the PENCOM DG to resolve my pension issue?
    PENCOM: Send the PIN numbers.

  • Pension Fund Management, Custody: Understanding Roles of PFAs, PFCs

    Pension Fund Management, Custody: Understanding Roles of PFAs, PFCs

    The successes attained since the advent of the Contributory Pension Scheme (CPS) in Nigeria are often ascribed to the fundamental structures upon which the scheme was built.
    A key feature is the separation of management and custody of pension funds. While Pension Fund Administrators (PFAs) are saddled with managing pension funds, Pension Fund Custodians (PFCs) are responsible for the custody of the funds.
    These Pension Fund Operators (PFOs) are licensed, supervised, and regulated by the National Pension Commission (PenCom). Therefore, understanding their roles will provide further insight into the workings of the CPS.
    PFA roles
    The roles of PFAs under the CPS include Registration of Contributors, Crediting of Individual RSAs; Taking Investment Decisions; Payment of Retirement Benefits; Customer Support to RSA Holders; Rendering Returns to PenCom; and Appointment of Pension Fund Custodian.
    Registration of Contributors
    The PFA is responsible for opening a Retirement Savings Account (RSA) for an employee and issuing a Personal Identification Number (PIN) to the employee. This is done after the employee has completed the RSA registration forms and provided other necessary documentation. It is noteworthy to state that the selection of a PFA is the exclusive right of an employee.
    Crediting of individual RSAs
    PFAs are responsible for crediting RSAs with monthly pension contributions. The contributions are deducted by the employer and remitted to the PFC with an accompanying schedule that contains the names, RSA PINs, and amount and period of remittance.The PFC in turn advises the PFA upon receiving the schedules.
    Taking investment decisions
    The pension contributions in individual RSAs are pooled together by the PFA into a fund that is invested in various allowable asset classes.The PFA is responsible for taking investment decisions as a fiduciary duty to ensure safety and fair returns for the benefit of contributors. These investment decisions must be in accordance with the Investment Regulations issued by PenCom. Income earned is for the benefit of contributors.
    Payment of retirement benefits
    The main objective of the CPS is to ensure the payment of retirement benefits as and when due. The PFA is, therefore, responsible for processing the retirement benefits of a retiree under the CPS.This includes ensuring the retiree provides all required documentation at least six months prior to retirement. The PFA is also responsible for obtaining necessary approvals from PenCom and issuance of instructions to the PFC for payment of retirement benefits.

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    Customer support to RSA holders
    The PFAs provide customer support services to the RSA holders, including issuing RSA statements at least once every quarter. In carrying out this function, PenCom ensures that PFAs have an adequate number of branches to serve locations where they have a significant number of registered RSAs under their management. In addition, PFAs are also expected to have the necessary technology that widens access to their services for RSA holders.
    Rendering returns to PenCom
    PFAs are mandated to maintain proper books of account and render off-site returns to PenCom. The off-site returns assist PenCom to adequately supervise the PFAs. The returns include the daily valuation reports on investment, monthly and quarterly returns on various aspects of PFAs’ operations, amongst others. In addition to the off-site reviews, PenCom conducts routine on-site examinations annually and special examinations whenever the need arises.
    Appointment of pension fund custodians
    As noted earlier, the management and custody of pension funds are carried out by the PFA and PFC. It is, therefore, the PFA’s responsibility to appoint a licensed PFC to provide custody and safekeeping for the pension funds under its management.
    PFC roles
    On the other hand, the roles of PFCs are Collection of Pension Contributions, Safekeeping Services; and Settlement and Clearing.
    Collection of pension contributions
    The monthly pension contributions are deducted by the employer and remitted to the PFC, accompanied with schedules that contain the names, RSA PINs, PFA name and other details of the employees. It is the PFC’s responsibility to advise the PFA upon receipt of the contributions, which in turn credits individual RSAs with the amounts.
    Safekeeping services
    Ensuring the safety of pension assets is a key principle of the CPS. The PFC registers the assets in the PFA’s name and keeps physical securities in the vault or central depositories. In essence, the ownership documents of pension fund assets acquired by the PFA during its management function are kept safely by the PFC, to the exclusive order of the PFA, on behalf of individual pension contributors. The pension fund assets held by the PFC are fully separated from its company funds and that of its parent company.
    Settlement and clearing
    The PFC is responsible for executing investment decisions for the PFA. Once a PFA decides to invest in a particular security, it advises the PFC, which effects payment for the securities to the counterparties. Where a PFA decides to sell some investments to realise profit, the PFC will receive the consideration paid on behalf of the PFA. Furthermore, the PFC is also responsible for benefit payments to beneficiaries as advised by the PFA and accompanied by requisite approval by PenCom.
    It is noteworthy that PFAs and PFCs satisfy rigorous licensing criteria. Currently, there are 19 PFAs managing pension fund assets on behalf of RSA holders and 3 PFCs. PenCom is committed to effective regulation and supervision of the pension industry to ensure that retirement benefits are paid promptly.

    •Culled from PenCom

  • CPIN inducts IGP, Senator, 14 others as fellows

    CPIN inducts IGP, Senator, 14 others as fellows

    The Chartered Pension Institute of Nigeria (CPIN) has inducted the Inspector-General of Police (IGP), Kayode Egbetokun; Chairman, Senate Committee on Establishment and Public Service Matters Senator Cyril Fasuyi and Chairman, House Committee on Pensions, Hussaini Jallo as Fellows at the institute’s investiture/Induction of new Fellows and Associates in Lagos.

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    Also inducted were Senator Solomon Adeola, Olaide Mohammed; Olufemi Ogunbanwo; Akeem Ige; Lukman Muraina; Babatunde Adefusi-Owate; Abdumalik Sarki; Kashim Fugu; Kucas Durojaite; ACP Adedeji Okemuyiwa; Salami Ozomata; Jimoh Korode and John Kalu
    President/Chairman of Council, CPIN, Umaru Kwairanga urged them to strive for professionalism, use their competence to help the country achieve her transformation and address the issues of pension problems.
    Egbetokun, who was represented by the Commissioner of Police, Lagos State Command, Adegoke Fayoade, appreciated the institute for the honour, stating that the award would strengthen the relationship between the Nigeria Police and pension industry.

  • PTAD: Resolving pensioners’ issues

    PTAD: Resolving pensioners’ issues

    BOLAJI: Dear Omobola, thanks so much for solving retirees’ problems. My name is Bolaji, a former staff member of National Youth Service Corps. My last monthly payment was in September 2020. I have sent my documents several times. I was verified by PTAD on May 30, 2023 and they promised that my cumulative arrears would be paid within three months. My last monthly payment was September 2022. PTAD, I am alive, please, effect my payment.

    PAUL: It is pertinent to note that all retired police officers in the PTAD, were notified of the “I AM ALIVE” programme through the website in 2023. I was among those PTAD who sent a text message to do “I am Alive” confirmation in October, 2024.

    To this end, I was mandated to do it on 20/10/2024. I got a text message again to do my “I’m Alive” confirmation before February 10, 2024. When I contacted some of my colleagues to know whether PTAD had sent such information to them, they said no. With this, I became worried. I revisited the last “I’m ALIVE” confirmation website I did and I was informed that the last done on 20/10/2023 expired on 20/4/2024. So, I want to know categorically from PTAD what is the time limit for the confirmation. Should it be done instead of someone or a member of the staff calling indiscriminately and sending text messages.

    PTAD: Please, disregard any text message asking you to verify that you are still alive before the six-month period expires.

    AKINMUSAYO: Good day, my complaint bothers my father who retired 19 years ago. He is yet to be paid gratuity. His name is and he retired in May 2004 from the Ministry Defense.

    PTAD: Computed and audited

    OLUSOLA: My name is Olusola, Sgt. Rtd. I retired in 1994. I learnt that PTAD has harmonised the pension allowance of IGP, DIG, and AIG and left C.P to rank and file. Please, what is the correct position on this? Thank you.

    PTAD: The Directorate is yet to receive any directive on the harmonisation from the relevant authority.

    ADEWALE: Good Day, my name is Adewale, Cyber Cafe operator in Ado Ekiti, the Ekiti State capital. Many retirees come to my business for ‘I AM Alive’ verification. Many were successful but some were not after four to five attempts to take their picture before it locked up.The finger verification is also not working. Kindly help me to know how to go about the finger verification. Thank you.

    PTAD: We have contacted Mr. Adewale.

    SHAGOSHA: I wish to remind you of the death benefit of my sister, Patience, who until her death, served in the Nigeria Police Force in Dutse Division, Jigawa State. I would be very grateful if my request is considered. Thank you.

    PTAD: The Next of Kin(NoKs) are to forward an Enlistment letter; Bank statement from January 2010 to date; and Declaration of age of NoK.

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    AYOOLA: Hello, my complaint is about the stoppage of my monthly pension.            PTAD: Pensioner was in the employment of Local Government before March 31, 1976, and he is not eligible for Federal share of pension under the Directorate.

    SUNDAY: Good day, my name is Sunday from Cross River State. My father died on July 10, 2005 while in police service. He is the late inspector Okimba. His last place of service is Akwa Ibom State. I went on to process his entitlement as his next-of-kin in 2015 at the PTAD office Abuja where I was verified and captured with my pensioner number. But up till date, I have not been paid. Kindly help me.

    PTAD: There was incomplete documentation at the time of verification. NoK is requested to come forward with these additional documents: Enlistment form; Emolument form; Letter of Administration; ; Marriage Certificate; Introduction Letter from Last Command; Valid Means of Identification; NoK’s Birth Certification; and NoK’s BVN.