The Nation Newspaper

Tag: non-implementation

  • ‘Funding, non-implementation of new rate affecting pension growth’

    The pension fund keeps rising, hitting N8.23 trillion in May. But its contribution to the gross domestic product (GDP) is five per cent. Why is this so? According to National Pension Commission (PenCom) Acting Director-General Mrs Aisha Dahir, inadequate funding of retirement benefits in the public sector, non-implementation of the new rate of pension contributions, among others, are hampering the system’s growth. Omobola Tolu-Kusimo met her.

    Despite the achievements of the Contributory Pension Scheme (CPS), the informal sector and the self-employed have not been captured in the scheme. What are your plans for them?

    The Pension Reform Act under Section 2(3) provides that employees of organisations with less than three employees as well as self-employed persons shall be entitled to participate in the Contributory Pension Scheme in accordance with guidelines of the Commission. The  employees referred to under Section 2(3) of Pension Reform Act 2014 are not covered by any pension scheme due to the nature of their employment; therefore, the Commission considered it necessary to develop the Micro Pension Plan to cover these employees.

    The Micro Pension Plan is an arrangement for the provision of pension to the self-employed and persons in the informal sector through the Contributory Pension Scheme.  This means that traders, stylists, farmers as well as self-employed professionals, such as accountants, architects, lawyers, and artisans, can contribute to having pension after retirement. Some features of the Micro Pension Plan are Flexible registration, Simplified registration process. Contributors can register with a PFA of their choice, Flexible modes and rates of contributions.Withdrawal of pension benefits will be flexible. The Commission is yet to roll out the Micro Pension plan because it wants to ensure that it provides a policy that will ensure that the needed flexibility is put in place for these persons; contributors get optimal return on investment; and the protection of the rights of contributors.

    The Commission has released the draft guidelines and framework on the Micro Pension Plan to the Licensed Pension Operators and the various stakeholders. Feedback from the stakeholders and operators have been received, considered and incorporated. The final guidelines for the Micro Pension Plan(MPP) will be released as soon as they are approved. Meanwhile, the Commission is developing the required ICT infrastructure to drive the process and this is critical to the success of the Micro Pension Plan. It is envisaged that before the year ends, the plan will commence.

     What is the cause of delay in opening transfer window despite the clamour by contributors/retirees to have an opportunity to change their PFA.?

    The Commission has developed the guidelines for the Retirement Savings Account (RSA) Transfer. However, to operationalise them, a number of initiatives would have to be implemented to ensure its successful implementation.The clean-up of the records and biometric identification of the existing contributors to remove multiple RSA registrations are essential. In addition, the necessary ICT infrastructure to drive the process is also being developed. These initiatives are at an advanced stage of completion. It is envisaged that, all things being equal, the Transfer Window would become operational before the end of the year.

    Do you think availability of transfer window will boost customer service delivery under the CPS?

    Yes, the availability of transfer window will go a long way in addressing the issue of poor service delivery in the pension industry. Contributors will have the liberty of moving from one PFA to another, if they are not satisfied with the services being provided by their PFAs. The transfer window will make the industry become very competitive; the operators will come up with many innovations to attract and retain customers in the market. The transfer window will, no doubt, make the operators to improve their service and strive for excellence.

    What is the value of pension fund assets and what are its effects on contributors and the economy?

    The CPS has consistently accumulated pension assets since inception. It is noteworthy that the value of pension fund assets had grown from N265 billion in 2006 (which was the year of actual commencement of investment by the pension operators) to N8.23 trillion as at June 30, 2018.

    As at April 2018, the total number of registered RSAs stood at 8.02 million with the public sector (comprising federal and state government employees) and the private sector accounting for 3.53 million and 4.49 million.

    There are complaints that pension payout is low under the CPS compared to the DBS. How are you addressing this?

    Pension payment under the Contributory Pension Scheme (CPS) is dependent on the total RSA balance at retirement. The monthly pension is also a factor of the lump sum collected. If the lump sum is too large, the monthly pension is reduced appropriately. One can also boost his/her RSA balance by subscribing to voluntary contributions. This would allow contributors to make additional monthly contributions over and above the statutory rate of eight per cent. The employer may also wish to make additional contributions over and above the statutory 10 per cent for its employees. Recently, the Commission introduced pension enhancement for retirees under the programme withdrawal. This initiative which took effect from December 2017 provides an opportunity for monthly pensions to be enhanced due to income generated by PFAs on the investment of the retiree assets.

    PenCom has released guidelines on the Multi-Fund Structure. What are the objectives and how will they affect the growth of pension fund?

    The new RSA Multi-Fund Structure involves the creation of multiple Retirement Savings Account (RSA) Funds, with assets allocation, made to fit into the different demographic (age) profiles and risk appetites of registered Contributors i.e. Young, Middle-age and retirees.

    The new structure would ensure that contributions of an RSA holder are invested in assets/securities with risks profile compatible with his/her age. For instance, it is expected that young contributors who have longer working years and relatively higher risk appetites would desire more investments in variable income instruments (e.g. Quoted Equities, Private Equity, Real Estate, and Infrastructure Fund/Bonds). On the other hand, middle-aged contributors or retirees who are risk averse, would prefer fixed income investments, with more stable streams of income. Consequently, the implementation of the Multi-Fund Structure will result to increase returns due to aggressive investments and, ultimately, growth of the pension funds.

    What does this mean to contributors and retirees?

    A major benefit of the introduction of the Multi-Fund Structure is that the contributions are invested  optimally to achieve enhanced retirement benefits. For example, younger contributors may prefer a pension fund with a higher level of risk and expected return to increase the expected value of their pension at retirement, while older contributors or already retired, may prefer a low risk fund to minimise the likelihood of a reduction in the value of their pension.

    Non-remittance of pensions by the public and private sectors seems to be eroding the objective of PRA 2014. What are you doing to solve  the problem?

    The Commission has adopted the strategy of employing Recovery Agents to recover unremitted contributions, including interest penalty from defaulting employers in the private sector. The activities of the Recovery Agents from inception in 2012 to date has led to the recovery of N14.38 billion made up of N7.42 billion and N6.96 billion as pension contributions and interest penalty.

    There was a cut of over N3 billion from the amount budgeted to offset backlog of pension benefits to retirees under the CPS by the National Assembly. How will this affect the Commission’s plan and what you are doing about it?

    The effect of the budget cut will further compound the payment of outstanding accrued rights benefits due to the retirees of the Treasury Funded Ministries, Departments and Agencies (MDAs). As at today, there is an outstanding arrears for retirees from May 2017. The Commission would continue to engage all the relevant stakeholders, such as the National Assembly, the Presidency, Budget Office as well as the Federal Ministry of Finance to ensure that all the accrued rights and other pension liabilities are paid. We are also aware that efforts are being made to accommodate the outstanding liability in the supplementary budget to bring succour to teeming FGN retirees who are waiting for the payment of their retirement benefits.

    Accrued rights is a major issue hindering pension payment  to the Federal Government’s workers? What are you doing baout it?

    Accrued rights is that part of the pension benefits due to employees who were under any retirement scheme, prior to the adoption of the Contributory Pension Scheme(CPS). The outstanding amount for FGN employees has been communicated to the government and in previous times, what was appropriated was short of the amount advised. This is one of the reasons for the delay. But we are confident that money will be released to defray this liability. Last year, N54 billion was released when there was some intervention by the Federal Government. My appeal is for retirees to bear with us. These are liabilities from the government and government is trying. As mentioned earlier, we are engaging all the relevant stakeholders. The government has the will and it has been shown by the release of the N54 billion. Definitely, we are hopeful that as we mount pressure and there is good intention as already demonstrated, this liability will be cleared soon.

    About 25 state governments are yet to implement the CPS, leaving their pension system in disarray. What are you doing to enforce the PRA 2014?

    You would recall that the Pension Reform Act 2004 did not initially mandate states and socal governments to adopt the Contributory Pension Scheme (CPS). However, with its re-enactment in 2014, state and local governments were mandated to adopt the CPS. Accordingly, the Commission had relentlessly pursued the engagement of states between March 2016 and July 2017 and had engaged key government officials and Labour Unions in all the states. As a result, 26 states and the FCT have made significant efforts towards implementation of the CPS, nine states are at the bill stage of implementation while only one state has not taken any significant step in this direction.  It is, however, imperative to point out that many of the critical stakeholders in the states are yet to grasp the tenets of the CPS and how state governments can achieve full compliance.

    It is worthy to note that individual states are developing at varying phases based on the resources available to them. However, we are of the view that the CPS would be fully implemented in all the states once there is the necessary political will from the governors.

    What are the challenges facing  the Commission in the execution of its oversight function?

    The two major challenges in the implemention of the CPS are one, inadequate funding of retirement benefits.

    The portion of the Federal Government’s total wage bill being set aside for the settlement of accrued pension rights of its employees that migrated to the CPS from the Defined Benefits Scheme remains inadequate. Furthermore, there are delays in the release of funds into the Retirement Benefits Bond Redemption Fund (RBBRF) Account with the Central Bank of Nigeria by the Federal Government. Consequently, FGN retirees are not being paid their retirement benefits promptly. In April 2017, Mr. President approved the release of N54 billion for the payment of part of the outstanding accrued pension rights. There were also subsequent monthly releases of funds for the purpose. However, there are still outstanding payments for retirees from April 2017 to date.

    The second problem is inadequate funding of retirement benefits.

    The rate of pension contribution was increased by Section 4(1) of the PRA 2014 from a minimum of 15 percent to 18 percent, comprising eight percent by the employee and 10 percent by the employer.  However, despite having come into effect since July 2014 when the PRA 2014 was enacted. These enhanced rates of pension contributions are yet to be implemented by the Federal Government for its employees.

    The contribution of Pension Funds to the GDP is five per cent. This is low compared to other countries, particularly South Africa. How can this be improved upon?

    The Contributory Pension Scheme (CPS) has facilitated a pool of pension funds, which have consistently accumulated to over N8trillion as at May 2018. As you  rightly noted, there are enormous potential for growth of the pension funds to account for a significant proportion of the GDP. Indeed, the Commission’s ongoing strategy implementation aims to attain an increase in the ratio of pension funds to GDP to at least 10 per cent by 2019. The specific measures planned to achieve this include, firstly, the expansion of coverage of the CPS to the underserved economic sectors through Micro Pension and renewed enforcement of compliance. Our objective in this direction is to attain at least 20 million contributors by 2019. Secondly, we seek to grow the assets through more investments in variable income instruments that generate higher returns. To achieve this, we commenced implementation of the Multi-Fund Structure in July 2018, which segregates the funds based on the risk profile of contributors and gives them an opportunity to choose subject to age parameters. Furthermore, the increase in contribution rates in the PRA 2014 from a total of 15 per cent to 18 per cent comprising 10 per cent by employer and eight per  cent by the employee would also increase the size of pension funds when fully implemented for Treasury Funded Federal Government of Nigeria MDAs. The Commission has also intensified efforts at ensuring the payment of all outstanding pension liabilities including accrued pension rights and pension increases that are yet to be implemented.

    What are your plans for the industry?

    In addition to the various measures at growing the size of pension fund assets highlighted above, the Commission is leading efforts at attaining excellence in service delivery in the pension industry. The industry is already leveraging information technology to deliver better services to the contributors and retirees. The Pension Fund Administrators have been expanding their branch networks to ease customer interface, while the Commission has been operating its zonal offices in each of the six geo-political zones of the country. We are also intensifying efforts at ensuring the adoption and implementation of the CPS by all the states. Other measures in1clude a wider public enlightenment and education of the CPS to attract more participation.

     

     

  • Non-implementation of industrial revolution plan worries OPS

    There are indications that the Federal Government has jettisoned the implementation of the Nigeria Industrial Revolution Plan (NIRP) initiative in its economic reform policy despite inaugurating the Nigeria Industrial Policy and Competitiveness (NIPC) Advisory Council.

    Information emanating from one of the key voices of the Organised Private Sector (OPS), the Manufacturers Association of Nigeria (MAN), showed that the government had technically replaced the NIRP with the Economic Recovery and Growth Plan (ERGP) in its bid to industrialise the country.

    It said with the development, Nigeria may miss N5 trillion revenue target from the manufacturing sector yearly.

    NIRP, a flagship industrialisation programme, was meant to fast-track industrialisation, accelerate inclusive economic growth and job creation, transform Nigeria’s business environment and stop the drain on foreign reserves caused by importing goods.

    Speaking at the weekend, the MAN President, Dr. Frank Udemba Jacobs, said OPS had been advocating the scheme by mounting pressure on the President Muhammadu Buhari-led administration to adopt NIRP.

    According to him, the administration has made it known to the OPS that most of the initiatives in the NIRP are already being implemented in the ERGP in the economy.

    He stated that Nigerians may not see the full implementation of the NIRP since many of the recommendations in the scheme were already in ERGP, adding that indirectly, the current government was implementing NIRP through ERGP.

    He said the major documents in ERGP and the rest of the things were offshoot of NIRP.

    “There was a time we confronted the Minister of Industry, Trade and Investment, Okechukwu Enelamah and he told us that he was aware of it and everything they were doing, they adopted NIRP as a policy. And when we look at all that is happening under the ERGP, it is very obvious that some of the recommendations made in NIRP are contained in ERGP. So, we are very satisfied with the implementations so far made in the scheme,” he said.

    However, he said with the state of things on the NIRP implementation, government’s hope to realise N5 trillion revenue targets from the manufacturing sector annually is in jeopardy.

    He said: “No, it hasn’t been realised. I believe NIRP is a working document. What the ERGP did was to take some aspects of it.

    “Don’t forget that NIRP started long before this government. But when this government came, we advocated that it should adopt NIRP because that is the way to industrialisation, eventually, we convinced them and they started to adopt it.

    “They wanted to come up with their own economic programme and we told them that they could not do away with NIRP. It is just not only a government’s policy but also have the inputs of the private sector and at that point they said they would adopt it and of course, they did. So, this is part of what we are seeing in ERGP.”

     

  • New minimum wage: NLC warns against excuses for non-implementation

    •As NECA, states shun public hearings

    The Nigeria Labour Congress (NLC) says it will not entertain excuses from any state government and even the private sector on their inability to pay the planned new minimum wage.

    President of the Congress, Comrade Ayuba Wabba, said in Lokoja, the Kogi State capital that the implementation of the new minimum wage should not be a problem provided state governments across the country cut down on their excesses, especially their large number of political appointees.

    He spoke at a public hearing on the new national minimum wage in the northcentral zone.

    Benue, Kwara and Niger state governments were not represented at the forum.

    The organised private sector, led by the Nigeria Employers Consultative Association (NECA) also stayed away.

    However, while Kogi State Government pledged to abide by the outcome of the committee’s recommendations, Plateau State said there has to be a corresponding increase in both internally generated revenue and allocation from the federation account for it to be able to implement the new minimum wage.

    Wabba, who is a member of the committee, said it was unfortunate that some of those who were supposed to make input into the work of the committee through the public hearing chose to stay away, adding that they should not turn round later to complain of not being carried along.

    He said if government at all levels could reduce their large number of political appointees and check mismanagement of available resources, there would be enough resources to take adequate care of workers welfare.

    He said a state like Jigawa, which did not access the bailout funds, has continued to pay workers’ salaries uninterrupted   and yet proposed a high new minimum wage to the committee.

    Governor Yahaya Bello of Kogi State said he is ready to pay the new minimum wage but said asked for an increase in distributable revenue in favour of states and local governments to enable them meet the financial responsibility that will be imposed on them by the new minimum wage.

    Represented by his Deputy, Elder Simon Achuba, the governor said: “Government earnings still depend principally on the Federation Accounts allocation.

    “That is why we will continue to require the special assistance of the Federal Government for greater impact.”

  • Group threatens strike over non-implementation of agreements

    The Council of Senior Staff Association of Universities, Teaching Hospitals, Research Institutes and Associated Institutions(SSAUTHRIAI) has threatened to down tools over alleged non-implementation its agreement with the Federal Government.

    The agreement was signed under the auspices of  the auspices of Joint Health Sector Unions (JOHESU).

    In a communiqué after its meeting at the Federal Medical Centre, Idi-Aba, Abeokuta, Ogun State, the Council urged the Federal Government to expedite action on, among others, the adjusted CONHESS, the review of retirement age from 60 to 65 years, and release funds to settle all disputed issues to prevent another crisis in the sector.

    In the communique signed by the Sector Chairman, Comrade M. O. Ogundipe, and  Sector Secretary  Comrade Ademola Olajire, the Council said: “We use this medium to call on Mr. President to prevail on the Minister of Health and other government agencies to implement the agreements they reached with unions rather than threatening them with the ‘No work, no pay’ policy,’’ adding that this could not prevent industrial crises but rather aggravate it.

    The Council noted that the statement credited to Health Minister, Prof Isaac Adewole, that “there was no agreement between the Federal Government and JOHESU”, when he addressed unions at the OAUTHC, Ile-Ife, was an attempt to incite unions against the JOHESU leaders.

    It advised the Minister to cross- check before making a statement, maintaining that it was on record that there were agreements between the FGN and JOHESU, even before Adewole assumed duties.

    It noted the non-payment of arrears of promotion between 2011 and last year), relativity allowance and others due to union members by the various managements of tertiary hospitals, urging the Federal Government to release funds for the payment of all outstanding arrears or else the Union may embark on industrial action.

    The communiqué stated that the Council noted the Adewole’s unwillingness to address the issue of tenure expiration of some chief executives of tertiary health institutions, appealing to the President to address the mater. It  drew the attention of  the tenure of the Medical Director of FMC, Jalingo.

    It urged the President to implement the Danjuma Kurau Committee Report on: “Renewals of tenure of chief executives of parastatals/agencies under the supervision of the Ministry of Health.”

    The Council described as worrisome the action of the ministry in directing that promotion of its members, who had skipped CONHESS 10, should be on the same grade level.

    “This directive is not only absurd, but also negates the dictates of the Public Service Rules. Council, therefore, calls on the Minister to reverse the directive.

    The communiqué stated that the Council received reports of non-payment of retirement benefits to retirees over one year after they disengaged from service, despite that they had contributed to their retirement. It hoped that the contributory pension scheme would not be like the previous one.

    “The continued delay in the remittance of monthly contributions to employees’ Retirement Savings Accounts (RSA) by employers as well as the failure of the Federal Government to release the accrued rights has complicated their situation. Council, therefore, calls on the various establishments and the Federal Government to promptly remit the necessary fund to the Retirement Savings Accounts of all workers.

    “We observed with dismay the challenges facing workers and the citizens due to the recession, dearth of physical infrastructure, insecurity, lack of adequate healthcare facilities, poor water supply, and unemployment/underemployment.

    ‘’Most damning is the dismal ranking of Nigeria by the World Health Organisation (WHO), which places us at par with war-torn countries. We call on the  government to take urgent steps to address these issues to improve the quality of life of the average Nigerian citizen before it is too late,” it added.

  • ‘Non-implementation of Pension Act, threat to workers’ future’

    The Amalgamated Union of Public Corporations, Civil Service Technical and Recreational Services Employees (AUPCTRE) has decried the failure of the Federal Government, states and local governments to implement the New Pension Act 2014 for workers. The union is urging all tiers of government to comply with the provisions of the act so that workers could have something to fall back on after retirement.

    Its General Secretary, Comrade Yusuf Lekke Zambuk, reiterated the union’s position at the 20th Plenary Session of the National Governing Council/AUPCTRE Week in Abuja.

    He regretted that the non-implementation of the New Pension Act 2014 has been posing a serious challenge to an average worker.

    Zambuk said the New Pension Act 2014, Part 11, Section 5, provided for a group Life Insurance Policy for each employee for a minimum of three times the total annual emolument of the employee. The premium is expected to be paid not later than the date of commencement of the cover.

    He, however, said as at date, neither the Federal Government, states nor local government has implemented this policy in favour of employees.

    He said: “It is surprising, however, that political office holders enjoy retirement benefits inclusive of medical, car, furniture among others, after serving their four-year tenure, but nothing is being said about serving public officials by the Federal Government, states and local governments.”

    However, the NGC-in-session has called onorganised labour, which is a Pan Nigerian Organisation and a defender of democratic values, to unite and rise up to effectively engage the political class to ensure that the dividends of democracy are not lost,” he said.

    In a related event, the Minister of Labour and Employment, Dr. Chris Ngige,  has said  the Federal Government will comply fully with section 173 (3) of the Constitution  that makes review of pension compulsory every five years or at any increment of salaries.

    Ngige gave this assurance when the leaders of the Association of Contributory Pensioners of Nigeria (ACPN) visited him in Abuja on Monday.

    He said: “The constitution is clear in section 173(3) on how pension should be administered. It is to be reviewed every five years or upon an increment in salary.

    A review was done in 2011 on minimum wage, and once the minimum wage is touched, it should automatically affect the pension”Serving the nation, nobody should discriminate against you. I don’t understand why in the same country some pensioners are receiving full benefits while others are not.

    This is unconstitutional.”The minister regretted the ordeal of the contributory pensioners and promised to urgently institute an appropriate liaison with Pension Commission (PENCOM) to rectify observed operational anomalies relating to the group so as to ensure that their benefits were fully paid.

    He added that pension matters by the International Labour Organisation (ILO) Convention 102 should be under the Ministry of Labour and Employment, assuring that the pensioners would not be abandoned by the federal government.

    He further said the existing Pension Act made it difficult to register two separate unions under pension as requested by the contributory pensioners.

    Earlier in his address, the Chairman of the association, Mr. Uche Ekpo, lamented the non-representation of the Contributory Pensioners by an organised union, insisting that what the Trade Union Registrar cited as reason for denying it registration covered only the non-contributory pensioners. He, therefore, sought the assistance of the minister for the registration of the body as a trade union so as to better articulate and push the interests of the members of the union.

  • Budget 2015 : House to probe non-implementation of capital allocation

    The House of Representatives has set up an Ad-hoc Committee to investigate what it called, the “non-implementation of Capital budget and serial violation of the Fiscal Responsibility Act.”

    Speaker of the House of Representatives said the Committee would investigate the level of implementation of the capital expenditure of the 2015 Appropriation Act.

    N556,995,465,449 was earmarked for capital expenditure in the 2015 budget, while   N4.9 trillion was approved by the National Assembly and signed into law by President Goodluck Jonathan.

    Hon. Ahmed Pategi (APC-Kwara) is the chairman of the Committee which is also to ascertain the performance of the Federal Ministry of Finance in carrying out its mandate as contained in the Appropriation Act, and section 30 (1,2) of the Fiscal Responsibility Act 2007. The Committees report is expected  to be submitted to the House on resumption which is about the last quarter of the 2015 financial year.

    The resolution was sequel to the passage of a motion moved under privilege by Hon. Patrick Asadu (PDP, Enugu).

    Asadu in the motion titled:  “Non-Implementation of Capital Projects as Contained in the 2015 Appropriation Act; Federal Government Budget and Serial Breach of the Fiscal Responsibility Act by the Federal Ministry of Finance, and Threats to my Effective Representation of my Constituency,” requested for the investigation and determine the extent to which  the budget was  implemented and its effects on the nation’s economy.

    He pointed out that the 1999 constitution, sections 80-83 clearly stipulates how monies belonging to the federal Republic of Nigeria can be kept and spent and clearly vests in the National Assembly the powers to appropriate monies for expenditure by government.

    “By sections 81 and 82 of the 1999 constitution as amended, the federal Government expenditures must be either as direct charges on the constitution, as contained in the Appropriation Act or supplementary Appropriation Acr where applicable, or as may be specifically prescribed by the National Assembly, while section 30(1) of the Fiscal Responsibility Act, clearly mandates the Hon. Minister of Finance through the Budget Office, to monitor and evaluate the implementation of the annual budget, and assess the attainment of fiscal targets and report thereon on a quarterly basis to the Joint Finance Committee of the National Assembly, and to also publish same in the mass and electronic media not later than 30 days after the end of each quarter of the financial year,” he said.

    The lawmaker further stated that “Since there has not being any constitutional amendment adjusting the financial year by the National Assembly nor has any public announcement has been made by the Ministry of Finance in any mass and electronic media on the implementation of the budget and attainment of fiscal targets”, he said.

    He noted that Section 81 and 82 of the 1999 constitution as amended, provides that Federal Government expenditures must be either direct charges on the constitution, as contained in the Appropriation Act or Supplementary Appropriation Act while applicable or as may be specifically prescribed by the National Assembly.