Category: Pension

The International Labour Office (ILO) has estimated that some 90 per cent of the world’s working-age population is not covered by pension schemes capable of providing adequate retirement income in new publication.

The new publication entitled: “Social Security Pensions: Development and Reform”, stated that bad management of many schemes makes matters worse and leaves much of the world’s population exposed to the risk of poverty in old age.

Director, ILO’s Social Security Department and editor of the book, Colin Gillion observes that the ILO sees old-age pensions as a responsibility of the State.

He said the stability they give workers is a mainstay of properly functioning labour markets and healthy economies.

He said: “In Thailand, where only one worker in five belongs to the state pension scheme, a major objective of the government is to extend coverage to all workers, notably home-based workers and people working in small enterprises. Old-age pensions were first introduced in Thailand in 1998 under the Social Security Act of 1990. Benefits will not be paid until 2013, at which time the earliest members of the scheme will have completed the qualifying period.

“As in many countries, Thailand’s pension scheme has a steadily ageing population to serve. Thirty years ago there were 17 working people for every Thai over 65. The ILO expects that by 2030, there will be only 13 working people for each over-65 person.

“Still, the problem of ageing remains far less acute in Thailand than in most OECD and middle-income countries. Japan, with the largest proportion of over-65s in the world, had a population with 13 workers for every over-65 as long ago as the early 1960s. The graying of Thailand’s population precludes reliance on the extended family to meet senior citizen’s needs.

“Funded pension schemes in many parts of Asia were hard-hit by financial turmoil, due in part to excessive government regulation of national financial systems.”

He continued: “Singapore and South Korea currently have the best managed schemes in Asia, Mr. Gillion says. They are financially viable with good compliance and performance indicators.

One striking feature of this region is the large number of countries that maintain provident funds, often a holdover from the colonial period, rather than mandatory pension schemes. A provident fund which normally pays out one lump sum upon retirement rather than a fixed monthly payment over a lifetime does not fulfill the same function as a pension scheme as it does not provide a replacement income for the length of the retirement.

“The Republic of Korea, the Philippines, Thailand since 1998 and Viet Nam all run social insurance pension schemes for employees and in some cases the self-employed too. China is working hard to adapt its pension system to the needs of an alarmingly ageing population.

Fifty years after gaining independence, India recently set up a social insurance pension scheme.

Pakistan opted for a social-insurance pension scheme in the 1970s.

Sovereign Trust Insurance Plc has described its workers as invaluable human assets who are critical to the growth and development of the economy.

 Its Managing Director/Chief Executive Officer,  Olaotan Soyinka, who made this statement at the company’s quarterly parley with reporters, described workers as very dedicated.

His statement coincided with the Workers’ Day held on Monday.

He said May 1 should be seen as  very important because it is set aside to shower encomiums and give due respect to workers regardless of their social strata in the society.

According to him, every legitimate work is important.

 While commending STI staff members, he urged them not to relent in the discharge of their duties as they strive to maintain the world-class standard of the STI Brand.

He said management will not stop at investing in the development of the company’s human capital while also placing technology at the heart of its business operations.

He assured the staff members that their labour would not go in vain as they contribute their quota to the growth of the organisation.

 He advised them to think of making the customer the focal point in their activities.

The Head, Human Resources, Sovereign Trust Insurance Plc, Adeola Onichabor, lauded the management for investing in human capital development at the local and international level.

 She added: “STI has on parade in the insurance industry an array of professionals in different fields of specialisation who effectively compliment the efforts of the professional underwriters in the organisation. I encourage my colleagues to continue in their stride of hard work and dedication to the ideals of the company.

“I also enjoin them to respect and honour one another in the discharge of their duties as the organisation strives to maintain best practice standards in the comity of insurance companies in the country and beyond. Our company is an equal opportunity employer of labour with high premium on dignity of labour and astute professionalism.’’

The goal of many employees is to own residential homes before exiting employment.

However, a significant constraint for most employees is their inability to provide equity contribution to access a mortgage loan to own a house.

Considering this, the Pension Reform Act 2014 (PRA 2014) made provision for Retirement Savings Account (RSA) holders to use part of their retirement savings as equity contributions for residential mortgages.

Last year, the National Pension Commission (PenCom) issued Guidelines on Accessing Retirement Savings Account (RSA) Balance towards Payment of Equity Contribution for Residential Mortgage by Retirement Savings Account (RSA) holders.

There are, however, application, documentation and remittance processes to follow by RSA holders desirous of accessing their accounts to pay equity contributions for residential mortgages.

The Director-General, National Pension Commission (PenCom), Mrs. Aisha Dahir-Umar, explained that the guidelines provide that an interested applicant must obtain an offer letter for the property from the owner or approved agent and approach a mortgage lender to fill out an application form.

She stated that the lender reviews the application form and verifies the genuineness of the property offer.

 She said: “The burden of due diligence is on the mortgage lender. A lender is a commercial bank or primary mortgage bank licensed by the Central Bank of Nigeria (CBN) to provide residential mortgages to ensure that the property is genuine and has a valid valuation report. When the property offer letter is confirmed, the applicants approach their PFA and request their RSA Statement to access the 25 per cent of their RSA balance for payment of equity contribution. Couples are allowed to apply if they meet the eligibility criteria. In such a case, each party shall apply to their PFAs with copies of the verified property offer letter.

“The PFA is required to issue a duly endorsed RSA statement to the applicant, whom the applicant forwards to the mortgage lender. Upon receipt of the RSA statement, the mortgage lender verifies if 25 per cent of the applicant’s RSA balance will be sufficient as an equity contribution. Where 25 per cent of the RSA balance is acceptable as equity contribution, the mortgage lender issues a mortgage offer letter to the applicant. If, on the other hand, 25 per cent of the RSA balance is insufficient, the mortgage lender is required to request the payment of supplementary equity contribution from the applicant. Upon confirmation of the additional equity contribution payment and meeting other requirements, the mortgage lender shall offer a mortgage loan to the applicant.

“Consequently, within two working days of issuing the mortgage offer letter to the applicant, the mortgage lender must forward to the applicant’s PFA copies of the mortgage offer letter, the mortgage application form, and the verified property offer letter. Additional information required includes the loan amount, equity contribution required, bank account details of the mortgage lender and indemnity by the mortgage lender to the PFA on the use of the equity contribution.

“In addition, the mortgage lender is also required to provide evidence of payment of the difference where 25 per cent of RSA cannot cover the needed equity.”

 The PenCom DG further said that on receiving a mortgage offer letter, the applicant must approach his PFAs to request payment of his equity contribution. The applicant shall obtain and fill out an application form for 25 per cent of his RSA balance and provide an indemnity to the PFA. The PFA also computes and validates that the requested amount is not more than 25 per cent of the RSA balance.

“In a joint application, each party shall apply to their PFA with a copy of the mortgage offer letter. The PFA shall forward the applications that pass its review to the Commission within two working days of successful review and validation. If the PFA identifies any exceptions or discrepancies during the documentation review, the PFA shall communicate the exceptions to the mortgage lender within two working days.

 “The Commission shall review  the applications submitted by PFAs and approve or reject the applications. Where the Commission declines to approve an application, it shall communicate the reason(s) for its decision to the PFA. Upon receiving the Commission’s approval, the PFA issues a payment instruction to its Pension Fund Custodian (PFC) to remit the approved amount to the mortgage lender within two working days. The PFC must pay the approved amount for equity contribution to the mortgage lender within two working days of receiving the PFA’s instruction.

“Primarily, PFAs are obligated to ensure that the applications for equity contribution by RSA holders meet the requirement of the Guidelines. PFAs are also mandated to maintain a Record of Applications received from RSA holders for payment of equity contributions for residential mortgages.

“Also, for transparency and ease of supervision, PFAs and PFCs are required to make periodic reports and returns to the Commission on payments made for equity contributions for residential mortgages”.

She urged RSA holders to contact their PFAs for more information and guidance.

She stressed that PenCom remains committed to the effective regulation and supervision of the pension industry.

OLALERE: Good day. My name is Olalere. I am delighted with The Nation’s Pension and Complaints and Solutions segment.

  I receive N4,246.26 as pension monthly. I need your assistance  to increase my monthly pension?

  Also, help me to get a loan to start a small business?

OGHORODI: Good day, I am Oghorodi. I retired on August 2019 from DESOPADEC, Warri.   My pension administrator is PAL Pensions.

My complaint is that my monthly pension of N6,900 is too small and the enhancement is equally small. I want to suggest that my balance of N785,151.82 be paid to me at once since my monthly pension is not up to N10,000. Thank you.

BAKO: Greetings to PenCom. My name is Bako. Since I retired in December 2016, I have not got any enhancement.

Seven years after retirement, I received an alert of N500,000 as accrued right balance. I went to my PFA, FCMB Pension, to withdraw the amount or a fraction of it, but to no avail.

They insisted that the money would be spread monthly, despite PenCom’s instruction. Why is this so?

ELIMIHELE: Good day. My name is Elimihele. I retired from NIPOST as a Deputy Director. I have an issue with the IPPIS. Between May 2012 and August 2014 (27 months), my monthly contributions were misrouted to Penman Pensions fund administration.

The company is a non-existent PFA, instead of my Premium Pension. I have written several times on this to IPPIS and Premium Pensions all to no avail.

Kindly advise me on what  action to take.

My PFA is Access Pension. I receive monthly remittance from my lump sum programmed withdrawals of N9,986 monthly.

My pension salary of N74,000 since 2017 remains unpaid from the Delta State Government.The salary is coming, according to sources at the bank.

But they have refused to pay FGPL or Access Pension. Same problem. Same bank. I don’t get to see the forwarded documents for the payment of the N74,000 as they are carefully omitted by a letterheaded paper superseding the authentic PFA copy, which includes the N74,000 and N9,989.

Please help me speak to customer Care officials of Access Bank, not to separate payment every month. Paying me only N9,989 monthy and omitting N74,000 isn’t right.

ASUQUO: My name is Asuquo. I retired from the University Of Uyo Teaching Hospital, Akwa Ibom State in May 2016.

My complaint is on the payment of annuity. I was struck down by stroke after my verification and have been receiving treatment until last year when Standard Alliance stopped payment without any reason.

I am aware that the company, through which I was receiving my pension as an annuitant, was revoked by NAICOM in June 2022.

My case is unbearable as I cannot complete my treatment. Please help me.

ANNONYMOUS: I refer to the March 15, 2023 publication of The Nation.

I would like to know if I am not qualified for the third pension Enhancement effective February 2023. I am yet to receive any message fromMy PFA, Premium Pension.

OGBAJI: I am Ogbaji. I lost my sister in 2014 and I am the next-of-kin. I am aware that President Muhammadu Buhari approved payment of outstanding pension from 2014. I have received the first payment in 2019 and up till date nothing has come in. I will like to know why?

THE NATION: The newspaper will intervene. Therefore Olalere, Oghorodi, Bako, Elimihele and others should look out for the newspaper next week for responses from PenCom.

ANNONYMOUS: I want to remain anonymous. I work at The Nation, Lagos. My PFA is Trustfund Pensions. I want to access 25 per cent of my pension fund to develop my plot of land.

My engagements have been with Trustfund Pensions, not mortgage firms. Any prospects with the latter on my RSA balance? Which mortgage company can give me the mortgage with the amount that I have.        

PENCOM: Twenty-five per cent can only be used towards equity contributions for residential mortage.

ISAH: I am Inspector Isah. I retired on January 15, 2020 at the Niger State Police Command on attaining 60 years. But I was paid only 25 per cent lump sum of N1,665,000 on February 2021 out of my total amount of N5,100,000.

I was also put on a monthly pension of N31,758 since March 2021. My complaint is that I deserve to be paid at least 40 per cent of my pension.

PENCOM: You are entitled to 25 per cent lumpsum.

FEMI: Good day, my name is Femi. I worked at Prudential Guards and was posted as a Guard to Adeola Odeku Ecobank, Victoria Island, Lagos between January 2014 and April 2015.

Between April 2017 and November 2018, I was deployed to Civic Centre, Victoria Island, Lagos.

However, none of my pension was remitted to my Leadway Pensure PFA account.

Kindly persuade the companies to remit my pension to the aforementioned years. Thank you.

PENCOM: Please send a letter of complaint with the supporting documents (letter of appointment, resignation/termination of appointment, pay slips and updated RSA statement) to the Director-General, National Pension Commission; Plot 174 Adetokunbo Ademola Crescent, Wuse 2 Abuja.

Premium Pension Limited, one of the leading Pension Fund Administrators in the country, has grown its Asset Under Management (AUM) to over N1 trillion at the end of 2022 financial year despite increasing economic challenges and stiff competition in the industry, the Chairman,  Premium Pension Limited (PPL), Mr. Ibrahim Alhassan Babayo, has said.

He made this known at the company’s 18th Annual General Meeting (AGM) held at its corporate head office in Abuja.

Babayo said the growth represents N120.93 billion and 12.08 per cent over 2021 year-end’s N879.48 billion.

He stated that the total number of retirement Savings Account Holders (RSAs) registered in the public and private sector organisations as at last December 31, stood at 774,235, representing 7.85 per cent of the industry count of 9,862,129.

Read Also: Pension complaints and solutions

He said PPL’s revenue rose by 18.34 per cent to N10.039 billion from N8.483 billion recorded in 2021, resulting in a Profit Before Tax (PBT) of N3.988 billion, up by 32.99 per cent year-on-year, while Profit After Tax (PAT) stood at N2.654 billion, representing 35.51 per cent above previous year levels.

The company also paid total dividend of N2.65 kobo, amounting to N1.740 billion, representing N1.20 kobo interim and N1.45 kobo final dividends of N788.14 million and N952.833 million.

He said the company has been paiying dividend for 15 consecutive years.

He said: “Today, we celebrate a significant milestone of attaining over N1 trillion AuM, a momentous achievement that demonstrates our resilience, innovation and commitment. Our collective efforts have enabled us to build a solid company that can withstand market volatility and uncertainty.

“As we reflect on our journey, the success we have achieved today did not come easy. We have had to navigate challenging economic conditions, disruptive technologies, and changing client preferences. Yet, we have remained steadfast in our commitment.” Babayo noted.

The Managing Director and Chief Executive Officer Mr. Umar Sanda Mairami, said the company as a top tier PFA, will continue to grow and deliver even greater value to its members, shareholders and other stakeholders through consistent Premium Experience.

The National Pension Commission (PenCom) has called on employers to consider an upward review of their 10 per cent portion of pension contribution and payment of more benefits to employees to enable them get higher pension upon retirement.

The Commission also urged the employers who are under the Contributory Pension Scheme (CPS) to consider the implementation of pension increases for CPS participants and the institution of other social security benefits for employees.

This is coming at a time some employees and retirees are complaining of low pension payment.

But experts have, however, said pension is a function of salary hence the more your salary, the more pension you receive.

PenCom Director-General, Mrs. Aisha Dahir-Umar, said paying more retirement benefits could attract and retain talent, enhance employee morale and loyalty and improve an organisation’s reputation.

She noted that the CPS is a sustainable pension system that provides a stable, timely, predictable and adequate source of retirement income for employees in the public and private sectors.

She recalled that the CPS was the outcome of reforms in the pension sector initiated by the Federal Government of Nigeria in 2004, with the reform initiative culminating in the enactment of the Pension Reform Act of 2004 (PRA 2004).

Ten years later, she noted, the PRA 2004 was repealed and replaced with the Pension Reform Act 2014 (PRA 2014).

The PenCom boss pointed out that while stakeholders have adjudged the implementation of the CPS a success, there were complaints about low pensions, especially from retirees in the public sector, because of their low pay relative to the private sector.

She said: “It is vital to state that the CPS provides a comprehensive framework that allows employers and employees to plan and save towards pensions. Accordingly, employers of labour can use other ways recognised by the PRA 2014 to increase the pensions of their retired employees.

“The other ways include the upward review of employer’s 10 per cent contribution. The PRA 2014 provides a minimum of 18 per cent of the employee’s monthly emolument to be deducted and paid by the employer to the Retirement Savings Account (RSA) opened by the employee. The 18 per cent contribution rate stipulated under Section 4(1) of the PRA 2014 is only a legal minimum and is shared between the employer and the employee in the ratio of 10 per cent and eight per cent ratio.

“The two parties can increase the rate of pension contributions through a Collective Agreement between them, which will improve employees’ pensions when they retire. Furthermore, an employer may elect to bear the entire burden of pension contributions for its employees, and in doing so, the employer is not limited to the statutory minimum of 10 per cent.’’

The DG continued: “Another way is the payment of additional benefits to employees. The PRA 2014 provides that, notwithstanding, the pension contributions made by the employer and employee into the employee’s RSA, “an employer may agree on the payment of additional benefits to the employee upon retirement.’’

She said any employer who wants to provide additional benefits  to its employees, especially those in the public sector, could take advantage of the law to enhance their employees’retirement benefits.

“Employers can also implement pension increases for CPS participants. The Federal Government had released funds for the settlement of pension increases to retirees under the Defined Benefits Scheme (DBS) for 2007 at 15 percent, 2010 at 33 per cent and 2019 for consequential adjustment. Meanwhile, the Federal Government did not provide funds to pay pension increases for eligible retirees under the CPS. FGN employees who were employed before June 2004 are entitled to Accrued Pension Rights.

“Accrued Pension Rights refer to the retirement benefits earned by FGN employees under the Defined Benefits Pension Scheme before the introduction of the CPS in 2004. It follows, therefore, that every time pensions are increased for FGN retirees under the DBS, the pensions of retirees under the CPS that have accrued rights should also be increased. Implementing pension increases would substantially address the issue of low pensions for FGN retirees under the CPS who have accrued rights,” she noted.

Mrs Dahir-Umar also wants employers to institute other social security benefits. “The absence of other social security benefits in Nigeria is partly responsible for the clamour by the retirees for exemption from the CPS.

“Nigeria needs to institute Zero Pillar Pensions in the form of a social security benefit, which is recognised and provided for under Section 16(2)(d) of the Constitution of the Federal Republic of Nigeria 1999 (as amended). A social security benefits system would go a long way to alleviate the sufferings of Nigerians, irrespective of whether or not they had formal employment. It will also augment earnings from occupational pensions.

“Exempting a group or an organisation from the CPS will not address the issue of inadequate pensions. On the contrary, it will put the system in jeopardy. The finances of the FGN are stretched against competing needs, and one has to only look at the budget deficit for 2023 of N10.78 trillion to appreciate the fact.

“Accordingly, the pension sector reform must be kept on track and expanded through the diligent implementation of the CPS. “As highlighted, various options are available to employers and employees to improve the adequacy of pensions for retirees, especially those in public service who are disproportionately affected by low pay. Providing additional retirement benefits can have several benefits for both employers and employees. It can attract and retain talent, enhance employee morale and loyalty and improve an organisation’s reputation,” she added.

She assured that PenCom remains committed to the effective regulation and supervision of the pension industry.

ADEDAMOLA: My name is Adedamola. I retired from the Nigerian Railway Corporation (NRC) in 2014.

Kindly help me find the reason  the Railway management fails to pay my pension empowerment training programme allowance.

 My pension allowance was not fully paid by my pension administrator, Premium Pension.

 Also, since the Federal Government announced new minimum salary wages, I have not been paid allowance.

PENCOM: Good day, sir. Please provide more details on this complaint. For example, the status of your employment, and RSA PIN

OMATSOLA: My name is Omatsola. I retired from the Delta State Direct Labour Agency, Asaba in January 2011 on Grade level 12 step 2. I attained 50 on June 7, 2016. According to the Pension Act 2004, a pensionable salary for a grade level 12 step 2 officer, Basic Salary N36,102:15; Housing Allowance N17,601.08; and Transport Allowance N10,298; Total N63,000/N74,000.

 This N74, 000 is credited into my account, but it is erroneously withheld since 2017.

On my monthly remittance, N9,989 is paid as deducted from my RSA. FGPL has contributed to this anomaly by not being totally transparent. I also need my enhancement as promised by FGPL. Please look into my complaint.

PENCOM: Dear sir, please send your complaint to info@pencom.gov.ng for further assistance.

CHUKWUEMEKA: Good day, my name is Chukwuemeka. I have been following up with my late wife’s gratuity since 2019. She passed on March 25, 2019 and I have submitted the documents required, but nothing has been paid.

PENCOM: Dear Sir, kindly provide more details, such as the Pension Fund Administrator and PIN of your late wife, her former employer and any other information that will assist the Commission  respond to your  complaint adequately.

ANNONYMOUS: Thanks a lot for reposting my request for intervention with PenCom on the payment of pension enhancement by the PFAs. Since my retirement in 2014, I received enhancement only once in 2017 and this has not been addressed by PenCom.

I have been excluded for the second time which means I won’t enjoy any enhancement until 2026, a period of nine years. This is unacceptable.

I retired as a Director of Finance, so I have knowledge in investment. I believe PenCom should pay more attention for the reason that most pensioners depend mostly on the monthly payments.

Therefore, we expect enhancement on monthly payments.

PENCOM: Dear Sir, kindly visit your pension Fund Administrator for more information on the status of your pension enhancement.

ASUQUO: Good day, I am Favour. I am the next of kin to my mother who died in 2018. My brother and I have submitted the necessary documents to Stanbic IBTC in Uyo, Akwa Ibom State.

Up untill today, my pension has not been paid.

PENCOM: Dear Favour, kindly provide the PIN, name and previous employer of your mother

DAMILOLA: Good day, my name is Damilola. I lost my dad in July 2021, and we started processing his death benefit in January 2022. We submitted the required documents, including Letter of Administration to PAL Pension in September, last year.

Each time I request to know what is going on with the processing, they keep saying they are on it. This has been going on for the past four months. How long does it take for them to process documents?  I have sent emails and SMS to company and to the official in charge, but they keep saying they are on it.

They said it would take about six months to work on the documents.

I don’t know what else to do. My mom is sick and the family is financially down. My siblings need to go back to school. I am really depressed. Kindly help me.

PENCOM: Good day Madam, Kindly provide the PIN of the deceased’s account to enable the Commission investigate the complaint.