Category: Pension

Leadway Assurance will be deploying artificial intelligence (AI) this year, its Managing Director/Chief Executive Officer, Leadway Assurance, Tunde Hassan-Odukale has said.

Hassan-Odukale made this known in his New Year’s message to stakeholders.

He said this became necessary with the business climates projected to experience significant debilitating micro and macroeconomic dynamics, ranging from inflationary cost pressures, exchange rate vagaries and disrupting talent attrition disclosed that the company

Hassan-Odukale: “As the business environment evolves, the speed of change being driven by technology will never be slower. This, obviously, has profound implications for business. Therefore, we will be deploying more data-driven and research-oriented initiatives, adopting data and artificial intelligence practices for improved processes and quick decision-making to promote immersive and exceptional customer experience. Indeed, part of our emphasis this year is to significantly enhance our operational excellence with improvements in our technology use.

“Also, in this year and future years, we are committed to strengthening our risk management strategies and technical expertise to ensure such risks are properly identified, assessed, and proactively mitigated.

“I am confident that the future holds immense opportunities for all our businesses, given the government’s huge investment in public infrastructure and imminent changes in the economy. Leadway as an organisation will continue to tap into these emerging opportunities and pursue its strategic goal of being ‘the most dominant insurance company in Nigeria’, in revenue and profit market share, within the corporate and retail market segments.’’

Hassan-Odukale reiterated that the organisation cannot achieve these objectives without a firm commitment to provide a world-class customer experience. He therefore charged his team to be more customer-centric in improving Leadway’s customers’ experience positively at every touch point in our customer service value chain.

“According to an expert’s report via the V7 Labs (a leading Artificial Intelligence and software company) on AI’s potential impact in the insurance industry, some of the emerging AI use cases for auto insurance include predictive cost analytics for claims; as well as leveraging machine learning techniques and data science to estimate the average claims cost per different customer segments to adjust premiums and to manage cash flow bette.

“Experts also cite McKinsey’s report that estimates that investments in artificial intelligence can unlock the realisation of up to $1.1 trillion in potential annual value for the global insurance industry,” he added. 

The National Pension Commission (PenCom) has captured 89,327 workers in the informal sector through Micro Pension Plan (MPP) as at last December 31, according to the commission’s Monthly Summary Report December 31, 2022 Ton Micro Pension Registration and Contribution obtained by The Nation.

The micro pension contributors grew from 84,612 in Quarter three, last year to 89,327 in Quarter four, growing by 4,715 in one quarter.

In the commission’s Quarter three, 2022 report, it was stated that a total 4,193 Micro Pension Contributors (MPC) were registered during the period under review by 18 Pension Fund Administrators (PFAs), bringing the total number of registered participants to 84,612 as at last September.

Within the quarter, Stanbic IBTC Pension Managers Limited, Tangerine APT Pensions Limited and ARM Pensions Managers (PFA) Limited registered the largest number of MPCs with 1,137, 1,055 and 934.

Conversely, Crusader Sterling Pension Limited, Guaranty Trust Company and Radix Pension Managers Limited had the least RSA numbers with four, one  and one.

The total pension contributions received from MPCs in Q3 2022 was N45.1 million, bringing the total Pension Contributions received to ?325.91 million from 9,000 MPCs by last September.

Further breakdown of the pension contributions in Q3 2022 showed that Stanbic IBTC Pension Managers Limited, ARM Pension Managers (PFA) Limited and Premium Pensions Limited had the highest contributions collected within the period with N20.21 million, N6.44 million and N5.90 million.

In contrast, the PFAs with the lowest contributions were Crusader Sterling Pensions Limited and First Guaranty Pensions Limited with N42,000 and N40,050.

Of the total pension contributions received, Stanbic IBTC Pension Managers Limited, Fidelity Pension Managers Limited and ARM Pension Managers (PFA) Limited accounted for the largest amount with N143.33 million, N38.61 million and N38.56 million, representing 43.98 per cent, 11.85 per cent and 11.83 per cent as at 30 September 2022.

The commission said it engaged with micro pension stakeholders, constituting Joint PenCom/PenOp Committee on the Implementation of MPP.

The Joint PenCom/PenOp Committee on the implementation of Micro Pension Plan (MPP) was constituted to come up with pragmatic steps to drive the implementation of the MPP.

Part of the initiatives developed by the Committee in driving the MPP include the creation of awareness, the development of incentives such as health insurance and the adoption of shared services platforms to improve service delivery.

OWOEYE: Dear Omobola, I am Owoeye. I complained about the backlog of pension arrears to PTAD and I sent my documents through Gmail to your office on December 31, 2020.

My complaints are: omission from payroll from January 2000 to February 2005; short-payment from February 1, 2005 till date (N419,315.10).

The PTAD officer, who was handling my file, ignored my bank statement and every complaint I made was underlined and asterisked in the bank statement.

  Also, the harmonisation approved by the Federal Government was not given to me.

PTAD: Mr. Owoeye should provide  bank statement from retirement till date.

NKANU: My name is Nkanu. I retired  from the University of Jos on February 29, 1995. I have not received my pension salary for May.

PTAD: Mr. Nkanu’s pension has been paid.

RAPAEL: Good day. Please I want to know why text messages are sent to me every five months to confirm whether I am alive while other people are not bothered. The only one other pensioner that gets such messages is in Akwa Ibom. I am not happy over it. The message should be made general not to two selected persons. Thank you.

PTAD: The messages are error. Kindly ignore.

FASHAKIN: Dear Omobola, I read your column on pension in The Nation and I decided to contact you. My name is Fashakin, a pensioner from Nigerian Railway Corporation (NRC). After our retirement 17 years ago, the management of the corporation paid part of our entitlement. But refused to pay the balance.

Several letters had been written and efforts made to get our legitimate right but they were rebuffed by the management. Then, we engaged a lawyer who wrote them to ask for our money.

The management replied our lawyer to forward our names and other information of his clients that they are owing. These were sent to them. Still, the management refused to pay.

All these happened last year. The case was referred to EFCC on January 11, this year. We waited for EFCC to call us for investigation, according to our lawyer. But when we did not hear from them, I went to their office on May 20, 2022 with a letter of reminder.

The letter was refused, to my greatest surprise. I was told that EFCC declined to investigate the case of fraud brought against the railway management.

Madam, I have the proof of ALL I have writing here. Please, for further inquiry for publication, my phone number is 08061224837. I would be glad if you could step in and look into our case. Thank you, madam.

PTAD: Pensioner did not state nature of complaint. He did not respond to phone calls. He can contact PTAD directly.

JULIUS: Dear Omobola, I represent myself and other underlisted federal pensioners that were dropped from PTAD’s payroll btween July 2022 to January 2023.

We are verified pensioners. Series of letters were written to PTAD, but all to no avail. We are appealing to PTAD to pay us because we are alive. We are: Julius Ocuan, Eyo, Kanu, Nathaniel, Etong, Assem; Andrew, Alexader; and Eyo Ita Eyo, all from Cross River State.

OYIBO: Good day, I am Mr. Peter Oyibo. I retired from NYSC in January 2005. I was cleared during the last verification that lasted for weeks in Calabar. Since my retirement, I have not being paid. Now I am 54 years old. My name appeared in The Nation that the pension had being computed. Till now, I have not seen any payment of arrears or monthly payment in my account.

Based on my calculation, I am being owed for over nine years. PTAD please pay me.

IRIOGBE: Dear Omobola, once again, I wish to express my gratitude to you for the good work you are doing for the pensioners. Please keep it up.

My matter was published in The Nation and PTAD said my complaint and that of others were being attended to. We hope the government would make funds available to PTAD to do the needful as payment of the arrears is long overdue.

Many thanks, from, Iriogbe.

OGUNROMBI: Good day, my name is Ogunrombi. My mother retired from the Federal Ministry of Labour in 2004. She was enrolled into monthly pension in 2010. But her gratuity had not been paid before she died.

I attended screening and verification in 2017 in Lagos and I have submitted all required documents for payment as Next-of-Kin (NOK), but till date I have not heard anything from PTAD. I even went to Abuja in 2020 to make enquiry about it and I was told that it has gotten to point of payment. Please help me check to know what is causing the delay. Thanks in anticipation

SURAJU: Dear Omobola, I am Suraju Kunle Otusajo a Lagos State pensioner with Federal share. After series of complaints PTAD wrote on the August 7, 2021 that my arrears had been computed but not checked and audited and pleaded that I give them time. This is the fifth month after your message of August 2022 and to confirm that I have still not heard from PTAD. Thank you and God bless.

OGAR: Dear Omobola, I am Ogar, a pensioner from CRS with federal share of both pension and gratuity. I retired on June 14, 2007 on Grade Level 14 Step 11. I have been paid my monthly pension after the verification of February 2017 but gratuity has not been paid.

I am, therefore, appealing to you to use your good offices to pay me my federal share of gratuity. Thank you.

THE NATION: The newspaper will intervene. Therefore JULIUS, OYIBO’ IRIOGBE, OGUNROMBI, SURAJU and OGAR should look out for the newspaper next week for responses from PTAD.

A total 26,556 organisations who complied with the Contributory Pension Scheme (CPS) have been issued Pension Clearance Certificates (PCCs) by the National Pension Commission (PenCom, The Nation has learnt.

The PCC is evidence of compliance with the PRA 2014 and a prerequisite for suppliers, contractors, or consultants, soliciting any contract or business from Ministries, Departments, and Agencies (MDAs) of the Federal Government.

According to PenCom, the 26,556 organisations remitted about N115.71 billion for their 378,096 employees.

Since the introduction of PCCs in 2012, PenCom has observed substantial compliance with the CPS by the private sector.

Analysis showed 715 more organisations got the PCCs in 2022 than the 25,841 organisations that obtained the certificate in 2021.

However, it is imperative to note that PCCs expires on the last day of the year, irrespective of the date they were issued within the year.

Consequently, all 26,556 PCCs given in 2022 have expired, and the organisations must apply and obtain fresh PCCs for the year 2023.

PenCom Director-General, Mrs. Aisha Dahir-Umar said the commission commenced the issuance of PCC to organisations in 2012 in line with the Pension Reform Act, 2014 (PRA, 2014), which mandates organisations with at least three employees to participate in the CPS.

She stated that PenCom issues PCCs to organisations that have complied with the requirements.

She reiterated its commitment to the  regulation and supervision of the pension industry.

To qualify for PCC, she explained that employers must ensure their employees’ open Retirement Savings Accounts (RSAs) with any Pension Fund Administrator (PFA) of the employees’ choice.

She said: “Employers must also remit employer and employee monthly pension contributions to the appropriate Pension Fund Custodians (PFCs) no later than seven working days from the payment date of salaries. Furthermore, employers with pension schemes before the CPS must transfer Pension Funds and Assets in their custody to licensed pension operators. Finally, employers must provide their staff with Group Life Insurance Policy (GLI).

“The Public Procurement Act requires the PCC to be submitted as evidence of compliance with the PRA 2014 by all suppliers, contractors or consultants soliciting any contract or business from Federal Government Ministries, Departments and Agencies (MDAs). However, it should be noted that under the PRA 2014, compliance is not mandatory for organisations that employ less than three persons. Still, their employees may do so voluntarily through the Micro Pension Plan. Therefore, PCCs are not issued to such organisations by PenCom,” she added.

 Requirements for the PCC

She said an organisation can obtain the PCC by applying to PenCom and attach certified list of employees of the organisation by the last fiscal year; certified rates of monthly contributions indicating the employer portion of minimum of 10 per cent and employee portion of minimum eight per cent and evidence of remittance of pension contributions for the last three fiscal years or from the date of incorporation/registration/licensing to the previous fiscal year of operation.

“In addition, the organisation must also attach evidence of transfer of pension funds and assets for any pre-2004 retirement benefits scheme into the employees’ RSA (where applicable); proof of remittance of all outstanding pension contributions and penalties (where applicable); and evidence of a valid Group Life Insurance Policy, which should include a Certificate of Group Life Insurance, Policy Document and proof of payment for the policy,” she added.

Issues to note in application for PCC

Mrs. Dahir-Umar further stated: “The processing of PCC applications, as designed by PenCom, is straightforward and transparent. The applications are processed within the advertised time frame of 15 working days, provided that the requirements are met. However, many applicants fail to provide the required documents and often submit their applications without regard to the timeline for processing. It is important to emphasise that the PCC is issued to the applicant organisation at no cost. The PCC is useable all year round, but its validity cannot extend beyond December 31 of the year it was obtained. Furthermore, in a notice to employers published in September 2017, PenCom warned employers against using third parties to get the PCC, as employers are encouraged to apply directly to avoid any hitches.

“Some of the noted deficiencies in the submissions by organisations include Under remittance of contributions; non-provision of Group Life Insurance for at least three times the total annual emolument of employees; understating the number of employees and remittance of outstanding pension contributions, as established by the Recovery Agents. In the event of any deficiency, a notification is forwarded to the applicant for remedial action before the issuance of the PCC. However, the PCC will not be issued, if the applicant fails to provide the requested documents.

“Furthermore, a list of organisations that were issued the PCC is uploaded on the PenCom website to facilitate verification by parties. Consequently, any certificate not found on the website is invalid, as the list is updated daily.There is also an interface through which the Bureau of Public Procurement (BPP) verifies the PCCs of organisations as PenCom feeds BPP the information daily,” the DG noted.

Lagos State government has reassured pensioners of consistent and timely income at retirement.

The state Commissioner for Establishments, Training and Pensions, Mrs. Ajibola Ponnle, who stated this during a seminar for retirees, noted that the state government would prioritise the welfare of its workforce and pensioners.

She said: “It is our expectation that the outcome of the seminar will provide you with a clear understanding of the relevant documents required for the processing of your retirement benefits under the contributory pension scheme,” she said.

“It is also expected that the sessions will answer most of your questions and ease your worries about life after retirement. The current administration is dedicated to the prompt payment of salaries and pensions. We are also committed to maintaining a leading role in the pension industry by improving the timely payment of pensions upon retirement from the state public service.

“The current administration since its inception in 2019 has paid over N44.5 billion to 11,854 retirees. We are constantly monitoring our Pension Fund Administrators (PFAs) and Annuity Service Providers (ASPs) for full compliance with the directives of the Contributory Pension Scheme (CPS)”.

She pointed out that they were not unmindful of the challenges faced by our senior citizens, such as the outstanding pension payments and the impact of the global economic crisis on the cost of living.

“We are working on various reforms to ensure our pensioners receive consistent and timely income at retirement.

“As you plan to retire, please ensure your information on the retirement process is from competent and reliable sources. Do not hesitate to contact the Lagos Pension Commission or the Ministry of Establishments, Training and Pensions for advice or clarifications on pension issues,” she added.

Pensioners under the Defined Benefits Scheme (DBS) receive their monthly payments on or before the 25th monthly, the Executive Secretary (ES), Dr. Chioma Ejikeme, has said.

The ES, in a statement, said they are improving their service to pensioners.

Explaining their payment process, she said: “PTAD carries out biometric verification of pensioners and computes a payroll approved by the Executive Secretary on or before the 15th of every month.

“Payroll is then uploaded into Government Integrated Financial and Management Information System (GIFMIS) payment system managed by the office of the Accountant General.

“The Central Bank of Nigeria (CBN) later releases the funds required for the payments to the Office of the Accountant-General of the Federation (OAGF).

“After these steps, pensioners will receive their due payments on or before the 25th of every month. Delayed payments to pensioners are due to technical glitches, scheduling of payments the office of the Accountant-General and delay of funds from the CBN.”

She added that the issue was raised with the accountant-general to ensure pensioners were given priority when funds were available.

•’Grievances can be settled’

SHOULD the Nigeria Police personnel be allowed to exit the Contributory Pension Schemes (CPS) as they are agitating, pensioners will be affected.

This was the position of Contributory Pension and Happy Retirement Advocacy (COPEHRA), a Non-Governmental Organisation (NGO), at the public hearing on Police Pension Board (Establishment) Bill, 2022 (SB 1009) and Nigeria Police Special Forces (Establishment) Bill, 2022 (SB 846).

At the hearing organised by the Senate Committee on Police Affairs, while the National Pension Commission, Pension Fund Operators Association of Nigeria, and Nigeria Labour Congress (NLC), among others,  kicked against the proposal, Senators, the Police and groups of Police retirees supported it.

COPEHRA, represented by its Legal Advisers, Mahmood Ayinla and Oyiminu Patessy Audu, argued that  the grievances could be corrected within the CPS.

The team said: “We do not support the Police to leave the CPS and be moved to the Defined Benefits Scheme (DBS). Ever since the global crisis in pension management, Latin America has led in policy reforms that have had their pensions management and administration switch from the Pay-As-You-Go/Defined benefit system to the Contributory Pension Schemes (CPS) where, in typical cases, a worker and an employer partly contribute to a fund to be invested in relevant mix of portfolio of assets.

“Consequently, the divergence in pension administration from its being the sole responsibility of the government or employer to a joint contributing system Retirement Savings Account (RSA) has been met with an increase in patronage and adoption world over, be it in the private or public service.”

Speaking on unfunded pension liabilities, statutory government disbursements and deliverables, Ayinla noted that the government is saddled with huge recurrent statutory expenditures as well as providing revenue for important capital projects.

“A three-year review of the country’s budget performance has shown that a large chunk of the budget is dependent on borrowed funds. The government’s deficit exceeds three per cent of the Gross Domestic Product (GDP) as quoted in Section 61 of the 2020 Finance Act.  While arguments can be made for the insecurity in the midst of dwindling economic resources, borrowed funds are expected to provide for economically viable capital projects such as roads, healthcare, and subsidy for farmers.

“Inclusion of pension will not impact the economy positively, but will further strain government’s resources. We should borrow and build infrastructure and not borrow to pay for pension and salaries. There is no sustainability in budgeting for a monthly pension sustainability of a non- terminal pension scheme, such as the defined benefit scheme, is far from providing a positive outlook.

“The government has been advised and is proffering ways to cut the cost of governance, overhead and recurrent expenditures to provide more for capital and developmental programmes and projects. “Incurring a life-long recurrent pension liability with increasing funding  is of no benefit to the nation as it also incurs administrative costs. One of the grievances of the police is the poor monthly pension of a corresponding officer grade in CPS, while in DBS, the pension was higher. This only calls for the government to increase the funding of the RSA and not to take over the pension payment, including its administration.”

Ayinla stressed that as exemplified in the telecoms sector reforms, the government is better off with a regulator of the various sectors than being a player, adding that the sector has enjoyed a boost in coverage, and revenue and has contributed to the economy via job creation, revenue tax, several products and services.

Considering the teething challenges, the country is better off now, Ayinla said, adding that so the pension industry would be.

“Do we say because we have issues with our GSM provider, we should  go back to NITEL days? he queried.

“The devastating past of the country’s pension industry, which is the DBS, cannot be compared with the ease, consistency and sustainability of the CPS.

“The former DBS was riddled with fraud, corruption and lack of transparency as the government continually budgeted with no corresponding reduction in pension liabilities.

“The CPS has provided a platform to track contributions and savings via monthly, quarterly and yearly statements to the contributors and pensioners while the regulator, PenCom, carries out their regular regulatory and compliance functions.

“In most DBS schemes over the years has shown poor accountability on the side of Ministries, Departments and Agencies (MDAs), Board of Trustees (BoTs) and pension schemes. There has been large management and administrative interference leading to misappropriation of funds and poor record keeping.

“At present, the government is borrowing a large percentage of the budget to pay pension and other expenses. This state of borrowing makes it impracticable to abandon a 100 per cent funded arrangement to an arrangement that looks for funding every month,” the groups added.

One of the objectives of the Pension Reform Act (PRA) is the establishment of rules and regulations, and standards for the administration and payment of retirement benefits, the Director-General, National Pension Commission, Mrs. Aisha Dahir-Umar, has said.

Specifically, Section 2(1) of the PRA 2014 provides that the Contributory Pension Scheme (CPS) applies to the Public Service of the Federation, the Federal Capital Territory (FCT), the states, and local governments, as well as the private sector.

However, by the provisions of the 1999 Constitution of the Federal Republic of Nigeria (as amended), state governments can legislate on pension matters. Consequently, state governments have to domesticate the CPS by enacting a state pension law.

Mrs. Dahir-Umar recalled that the National Council of State, at its meeting of August 2006, adopted the CPS for states and local governments.

She pointed out that following the  adoption, a Model State Pension Law was developed for the state governments.

She said: “PenCom reviews draft state Pension Laws and supports states in its implementation.

“At the end of 2022, 25 states, including the Federal Capital Territory (FCT), had enacted laws on the CPS, while seven states were at the bill stage.

“The enacted laws, which are in tandem with the provisions of the PRA 2014, is the first significant step towards the domestication of the CPS at the sub-national level.

“Five states have laws on the Contributory Defined Benefits Scheme (CDBS). Commendably, 15 states have established Pension Bureau/Boards, and 10 are remitting employer and employee pension contributions in line with the CPS. Seven states have started paying pensions to retirees under the CPS.

“The transition from the Defined Benefits Scheme (DBS) to the CPS or even the CDBS at the state and local government levels is significant and inevitable, even for the states yet to do away with the DBS.

“The CPS is structured to ensure that retired employees receive retirement benefits as and when due. The benefits are enormous. Theus the CPS is the best solution for pension liabilities, which many states are grappling with.

“States that fail to offset pension arrears are creating a financial burden on future generations as these pension benefits will continue to grow. States can avoid this trap by adopting the CPS.

“The CPS will stem further growth of pension liabilities and provide fiscal discipline in the budgetary process because pension obligations would be accurately determined and settled systematically. Importantly, assets are available at the exit of a retiree for the payment of pension benefits promptly, thus, no accumulation of pension arrears”.

She further stated that the CPS provides safeguards to enable states to combat corruption in the sector.

She said the pension contributions were received and held by custodians for the Retirement Savings Account (RSA) holder.

“The RSA holder can only access the funds at retirement or under specific conditions. Licensed Pension Fund Administrators (PFAs) invest the funds with the objective of safety and earning fair returns for the contributors.

“Pension assets cannot be used to meet the claim of creditors of pension operators, seized or subject to execution of judgment debt or sold, granted as a loan or used as collateral.

“Due to the contributory nature of the CPS, employers no longer need to bear the burden of making provisions for retirement benefits for their employees.

“Unlike the DB scheme, employees under the CPS are also responsible for contributing to their retirement benefits. Thus, reducing the financial burden on the employer.

“In addition, the scheme has provisions for employers to pay monthly pension contributions. This provision alleviates the burden on employers to make bulk payments to settle pension liabilities.

“The CPS is a more efficient avenue for financing state governments’ long-term borrowing needs via investible instruments such as infrastructural bonds. States that implement the CPS derive the benefits of generating long-term savings, which can promote the growth of their real sector as PFAs invest in bonds issued by such states. PFAs are not allowed to invest in the bonds of states yet to comply with the scheme.”

She continued: “Meanwhile, PenCom’s regulatory oversight of state and local governments’ pension schemes is guided by the provisions of the enabling laws in the states.

“Section 23(i) of the PRA 2014  emphasised that PenCom’s role in applying the CPS at the sub-national levels shall be to promote and offer technical assistance to states in line with the objectives of the scheme.

“Despite the huge benefits of the CPS, it would be contrary to constitutional provisions for PenCom to enforce the provisions of the PRA 2014 on the states without recourse to the states’ laws and prevailing economic limitations at every material point in time.”

She added: “PenCom has continued to adopt the persuasive approach to drive full implementation of the CPS at the states and local governments.

“PenCom, as the apex regulator of the pension industry, has intensified the drive to implement the CPS by states and local governments. The effective regulation and supervision of the pension industry remains PenCom’s priority.’’