The Nation Newspaper

Tag: Mrs. Aisha Dahir-Umar

  • MDAs’ Retirement Savings Accounts hit N205.16b

    The total pension contributions by employees and employers remitted to the Retirement Savings Accounts of employees of Federal Government Treasury-Funded Ministries, Departments and Agencies (MDAs), from April 2017 to January 2019 is N205.16 billion, Acting Director-General, National Pension Commission (PenCom) Mrs Aisha Dahir-Umar has said.

    She made this known to lawmakers in Abuja at a parley on Annual Pension Operations of  Pension Fund Administrators.

    This includes collections from contributors and amount paid to retirees, from April 2017 till date.

    She noted that the figure does not include the contributions remitted by the Accountant- General of the Federation into the RSAs of MDAs under the Integrated Payment Personnel Platform (IPPIS) platform as well as the contributions of employees of self-funded agencies and the private sector, which are being remitted by this category of employers to their workers’ RSAs.

    On the total amount paid as retirement benefits to retirees under the CPS, from April 2017 to January 2019, she said the PFAs under the supervision of the Commission paid 53,661 retirees N147.61 billion as lumpsum and N2.05 billion as monthly pension.

    Dahir-Umar said PFAs had so far transferred N144.57 billion annuity premiums to insurance firms. Similarly, a total of N28.75 billion was paid as lumpsum to 26,927 retirees, who choose  annuity as their payment mode in retirement, while N1.53 billion is being paid to them as monthly pension.

    According to her, pension contributions for Treasury-funded MDAs’ workers were deducted at source by the Accountant-General of the Federation and remitted to the RSAs of Federal Government employees on the IPPIS Platform.

    She said: “On the other hand, pension contributions of employees of MDAs that are not yet on the IPPIS are paid by the Accountant-General of the Federation into the Contributory Pension Account maintained with the Central Bank of Nigeria (CBN) for onward remittance to the individual RSAs of employees.

    “Flowing from the foregoing, the total pension contributions employee and employer remitted to the Contributory Pension Account maintained with the CBN and subsequently transferred to the RSAs of employees of FGN Treasury-funded MDAs, from April 2017 to January, 2019, is N205.16 billion.

    “The transparent methodologies and processes provided by the CPS for the administration of pensions and for the investment of pension fund in critical sectors of the economy is necessary for national development. The achievements recorded by the commission in the implementation of the PRA 2004 to date are enormous.

    ‘’Indeed, due to its consistent exemplary performance as a regulator in the financial services industry, PenCom gained unprecedented public confidence and acceptability. Thus, within the short period of its existence and operations, it was able to birth and successfully nurture the pension industry that boasts of accumulated a pool of long-term pension assets worth about N8.63 trillion as at December 2018. About 60 per cent of the total pension assets belongs to the private sector. In addition, the industry has not recorded any case of fraud or mismanagement of pension fund assets;

    “Consistent with its track record of performance, the commission was able to record many feats within the current period of transitional management that commenced from April 2017 to date. These include growing the asset base from N6.42 in March 2017 to N8.63 as at December 2018; increased contributor registration from 7.6 million to 8.41 million RSA holders as at December 2018; introduction of the Multi-fund structure of pension fund investment; reduction of management fees; introduction of the Micro Pension Plan; and many other major feats,” she added.

  • Pension reform impacts capital market, insurance, others

    • Insurance gets N304b annuity premium

    The pension reform has positively impacted on other sectors of the Nigerian economy, Acting Directing-General, National Pension Commission (PenCom), Mrs. Aisha Dahir-Umar has said.

    Mrs Dahir-Umar in a status report by the commission, said notably among the sectors that have benefitted from the reform are the insurance sector, the Capital Market, Corporate Bond Market and Rating Agencies.

    According to her, the reform facilitated the growth of Group Life Insurance and development of Life Annuity in the insurance industry.

    She stated that a total premium of N304.09 billion was paid to insurance companies  for the monthly Life Annuity as at December, 2018.

    She added that the monthly pension payment under the Life Annuity Scheme averaged N3.15 billion in December last year .

    She noted that this has significantly assisted the growth of the insurance industry in Nigeria, which is a special focus area under the Federal Government’s Economic Recovery and Growth Plan (ERGP).

    She stressed that the reform has also facilitated the development of the corporate bond market, deepened the Nigerian capital market and the development of rating agencies.

    She said: “Consistent with its track record of performance, the commission was able to record many feats from April 2017 to date. The number of registered contributors increased from 7.6 million as at the end of the second quarter of 2017 to 8.41 Retirement Savings Account (RSA) holders as at December 2018.

    “The size of the pension assets has grown from N6.42 trillion in March 2017 to N8.63 trillion as at December 2018. During the period, the number of Pension Fund Administrations (PFAs) increased from 21 to 22 with the licensing of NUPEMCO PFA, while the number of Closed Pension Fund Administrator (CPFAs) decreased from seven  to six with the exit of UNICO CPFA.

    “The Commission successfully defended the pension reform and neutralised four private Bills that attempted to undermine the Contributory Pension Scheme (CPS) and reverse the reform. We have also been able to introduce the Multi-Fund Structure of Investment of pension fund assets; approved a structured reduction of fees on net asset value of pension fund assets and concluded arrangements for the introduction of the micro pension plan for the participation of informal sector in the CPS”, she added.

  • Pension benefits: Irregular funding delays payment of civil servants-PenCom boss

    The Acting Director-General, National Pension Commission, Mrs Aisha Dahir-Umar has blamed the persistent delays in the payment of pension benefits to retired civil servants in the past few years to lack of budgetary allocation.

    Speaking in an interview with The Nation at the weekend, she said, a number of factors could be responsible for such delays.

    “We wish to explain that payment of pension benefit under the Contributory Pension Scheme is based on the balance on the retirees’ Retirement Savings Account (RSA) upon retirement. The components of the RSA/Retirement Benefit include Accrued Right, Monthly Contributions and Accrued Investment Income. All these have to be consolidated prior to payment of the benefits.”

    Pressed further, she said: “In the case of the Treasury Funded MDA’s retirees, the accrued rights represent benefits relating to their past service up to June 25, 2004 which has to be redeemed and paid into their RSA. in line with Section 15 1(a) of PRA 2014. Consequently, the Commission each year conducts Verification and Enrolment Exercise to obtain data and determine the accrued rights of FGN employees of the Treasury Funded MDA’s who would retire the following year. The amount of accrued rights determined is submitted for budgetary preparation and appropriation. This arrangement provided for seamless payment of accrued rights as amounts due to retirees for each month were released by the Federal Government. However, in the last two years, budgetary funding/releases had not been regular and adequate for the payment of the Accrued Rights falling due in the year due to decline in government revenue. As a result, there had been delays in the payment of pension benefits to FGN retirees.

    “contributors under the private sector and those working for agencies that are not FGN Treasury Funded, the payment of their retirement benefits had been prompt and regular.”

    Also, Budget Office of the Federation had been requested to create a separate expenditure sub-head for the payment and open a dedicated account with the Central Bank of Nigeria (CBN) into which the releases of the appropriated funds will be remitted.

    Subsequently, on monthly basis, funds released into the dedicated account with the CBN will be transferred to the PFAs to enable the PFAs pay to bank accounts of the Political Appointees.

    We know that your Commission has reduced the 50% lump sum payable to retirees as gratuity on retirement from their Retirement Savings Account (RSA) to enable retirees earn at least 50% of their last monthly salary as pension. Why the change in payment template?

    As you may be aware the Commission introduced a new template for programmed withdrawal, which took effect from 15th May, 2018.  There has however being concerns expressed by some stakeholders. The Commission in its usual responsive and consultative manner has decided to review the template. Consequently, the Commission has directed that Pension Fund Administrators (PFAs) revert to the old template till further notice.

  • PenCom chief: Micro-pension scheme to hit 30m by 2024

    The micro-pension scheme is expected to help raise pension contributors to 20 million by next year and 30 million by 2024.

    The Acting Director-General, National  Pension Commission (PenCom), Mrs. Aisha Dahir-Umar, who spoke in Lagos, also stated that micro-pension scheme is expected to generate about N3 trillion to the pension assets, while mobilising about 12 million contributors within five years.

    She said: “Micro pension scheme is targeted at self-employed people, especially those with irregular income, usually in the informal sector and are largely financially uninformed, with limited or no access to financial services, especially pension plan.

    “This segment, which is estimated to be 70 per cent of the country’s population, largely exists in Nigeria as artisans and self-employed persons.”

    She said PenCom  recovered pension contributions and interests totalling N1.34 billion from defaulting employers during the third quarter of 2017, adding that affected employers were issued appropriate notice to remit the outstanding pension contributions.

    “During the quarter, N1.34 billion was recovered,  bringing the total recoveries made since inception of the recovery agents’ activities in 2012 to N13.58 billion, “ she said.

    On pension contributions within the period, she said the total monthly pension contribution by contributors from the public and private sectors into their Retirement Savings Accounts (RSA) was N4.38 trillion.

    This, she said, showed an increase of N135.22 billion, representing 3.18 per cent of total contributions as at the end of the previous quarter.

    She added that about  N39.83 million was refunded to the contributors, while the sum of N127.13 million, representing contributions made by the Federal Government on their behalf was returned to the contributory pension account.

    She commended President Muhammudu Buhari for attending to retirees’ well-being by settling accrued pension rights for that period.

  • Pension fund hits N6.6 tr

    Pension fund hits N6.6 tr

    •PenCom to lawmakers, others: don’t undermine pension reform

    Pension fund assets under the Contributory Pension Scheme (CPS) has hit N6.6 trillion, the National Pension Commission (PenCom) Acting Director-General, Mrs. Aisha Dahir-Umar, has said.

    She made this known a paper titled: “Position paper on the Bill for an Act to Amend the Pension Reform Act, 2014 to Exclude Some Government Agencies from the Application of the (CPS) she presented at the Public Hearing organised by the Committee on Pensions, House of Representatives on the proposed controversial pension bills in Abuja.

    She lamented that despite these achievements, there had been  measures aimed at undermining the pension reform.

    She said there was need to consolidate the gains of the CPS and avoid policy reversals and that this could undermine public confidence and impact the  economy and Federal Government’s change agenda and economic recovery plans.

    Mrs Dahir-Umar, who said the total pension fund assets hit N6.42 trillion by last March, added that the fund grew by about N30 billion.

    She said the total pension assets were equal to about six per cent of the Nigerian rebased Gross Domestic Products (GDP).

    Similarly, the number of registered contributors grew to 7.4 million as at March, representing about 7.45 per cent of total labour force  and 3.95 per cent of total population.

    She pointed out that the pool of pension fund generated by the CPS has aided the deepening of Nigeria’s financial sector and provided a platform for attaining strategic programmes of government in infrastructure, housing and the development of the real sector of the economy.

    Besides she said, the CPS has simplified the payment of retirement benefits by issuing effective regulations and guidelines.

    She further said over 184,979 retired under the scheme during the period under review and are receiving pensions as and when due with an average monthly pension payment of N6.7 billion during the same period.

    She added that the pension reform has gained public confidence and acceptability within the short period of its implementation.

    The private sector, which hitherto was apprehensive of the CPS as a ploy by the public sector to raise funds to address its huge pension liabilities, has come to accept and is  implementing the reform. About 200,000 private sector employers are implementing the CPS and have contributed about 60 per cent of the total pension fund assets, she added.

    She said: “The CPS has also introduced transparency and integrity in the pension administration system. From inception of the reform to date, there had not been a single incidence of fraud or mismanagement of the pension funds and assets under the Scheme among other achievements.

    “In spite of these achievements, however, there have been recent actions, both legislative and administrative, aimed at undermining the pension reform in Nigeria. Exempting some government agencies would lead to divestment from FGN securities before maturity, which would have ripple negative effects on not only the finances of government, but on the entire financial system.”

    The Acting DG said another negative impact of exempting these agencies is the erosion of the pool of long-term investible funds accumulated under the CPS, suitable for economic development of any nation as illustrated in other jurisdictions, including developed economies.

    She observed that this would undermine the process of attaining development initiatives in the infrastructure, housing and real sectors of the economy, hinged on the utilisation of a portion of the pool of pension fund assets.

    “It would also be contrary to public policy for the Federal Government to succumb to the clamour for exemption of its employees from the CPS, which has so far proven to be efficient, effective and beneficial as a pension administration system. Indeed, it is the benefits of the CPS that are attracting increasing number of State Governments in Nigeria as well as other African countries to adopt and implement the Scheme in favour of their respective employees,” she added.