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Tag: PenCom

  • PENCOM engages telcos, regulators, others on micro-pension

    The National Pension Commission (PenCom) has commenced the sensitisation of network service providers and other relevant regulators for efficient and effective registration of people for micro-pension scheme. The Commission plans to kick-start the scheme next year.

    A statement by the Commission said workers in the informal sector are also being targeted with a view to creating the enabling environment and buy-in.

    According to the Commission, it is evident that a robust technological platform that would support the provision of customer services is necessary to effectively and efficiently register, collect contributions, provide Retirement Savings Account (RSA) support, pay benefits and provide financial advisory services to this class of workers.

    The statement read: “Coincidently, special mobile phone applications had been successfully implemented in some jurisdictions for financial transactions, including provision of pension services to the self-employed and informal sector workers. The success stories of these applications drives the confidence that similar platform can be designed and implemented in Nigeria.

    “Consequently,  the Commission had already commenced the sensitisation of service providers and relevant regulators as well as the targeted workers in the informal sector with a view to creating the enabling environment and buy-in. In addition, a Department has been established in the Commission to drive the implementation of the Micro-Pension plan.”

    The Commission explained that the Pension Reform Act (PRA) 2014 expanded coverage of the Contributory Pension Scheme (CPS) to the self-employed and persons working in organisations with less than three employees.

    “As this category of workers constitute the larger percentage of the working population in the country, there is no doubt that to achieve the Pension Industry’s strategic objective of covering 30 per cent of the working population in Nigeria under the CPS by the end of 2024, all efforts should be on deck  to extend coverage to this important segment of the Nigerian economy.

    “In addition, due to their widely dispersed nature and generally low and irregular incomes, there is need to provide a pension plan that would meet their special characteristics. In this regard, the Micro-Pension plan initiative has been conceived within the context of an industry wide strategy to bring this class of workers on board.”

     

     

     

  • PENCOM sensitises on micro-pension

    The National Pension Com-mission (PENCOM) has sensitised  Nigerians on micro-pension, multi-fund structure, voluntary contribution and other issues under the Contributory Pension Scheme (CPS). The enlightenment was done at the just-concluded Lagos  International Trade Fair.

    PenCom’s Head of Corporate Communications Peter Aghahowa said the pension clinic was used to clarify pension-related matters that bother workers and retirees.

    He said the pension clinic established at the Trade Fair was part of several initiatives that the commission embarked upon to sensitise and enlighten the public on the CPS.

    He said: “The Commission was at the Trade Fair to inform people on what the CPS is all about. It is part of the initiatives that the Commission has been bringing out to inform and educate the general public about pension schemes in Nigeria.

    “We had a stand at the trade fair which we named the pension clinic and it created an avenue for people to come in and get enlightened and educated and also make enquires about pension related matters. So we usually seize opportunities like this to sensitise people about different aspects of pensions.

    “Moreso, we have the initiative of the micro pension which we are working hard to launch come 2019. So it is another avenue to enlighten and inform people about that new initiative.

    “The commission also came up with a guideline for voluntary contribution to align and streamline the process and procedures for voluntary contribution. Before now of course, even the formal sector has engaged in voluntary contribution which is an additional contribution to the statutory one. The guideline streamlines the process of making and withdrawing contributions. It is expected to help the pension industry identify a uniform way of dealing with voluntary contribution transactions”, he added.

     

  • PenCom, PFAs pay N10.6b to 25,629 out- of-job contributors

    Disengaged workers numbering 25,629 have claimed 25 per cent of their pension fund to the tune of N10.62 billion between January and June, 2018. This was shown in a report by the National Pension Commission (PenCom).

    The workers were paid by their respective Pension Fund Administrators (PFAs) with PenCom approval.

    They were under the Contributory Pension Scheme (CPS) as Retirement Savings Account (RSA) holders, under the age of 50 years and unable to secure another job within four months of their disengagement. The payment is backed by Pension Reform Act (PRA) 2004 as repealed by PRA 2014.

    A breakdown of the payment showed that 12,857 of the disengaged workers claimed 25 per cent of their pension fund in the second quarter of 2018, receiving N5.65 billion from their respective PFAs in the period under review.

    A further analysis of the report showed that the private sector accounted for 95.60 per cent of those who benefitted from the payments, while the public sector accounted for 4.40 per cent.

    The report read: “Withdrawal of 25 per cent of RSA balances approval was granted for payment of N5.65 billion to 12,857 RSA holders, who were under the age of 50 years and were disengaged from work and unable to secure another job within four months of disengagement.

    “The cumulative total number of RSA holders, who were paid 25 percent for temporary loss of job was 275,950. They received N93.19 billion being the 25 per cent of the balances of their Retirement Savings Account as prescribed by the Pension Reform Act 2014.

    The report also showed that approval was granted for payment of N4.97 billion to 12,772 RSA holders, who were out of job in the first quarter of 2018.

    “The cumulative total number of disengaged RSA holders, who were paid 25 per cent was 263,093 and were paid N87.54 billion from inception to the first quarter under review.

    “The private sector, however, accounted for 95.60 per cent, while the public sector accounted for 4.40 percent.”

     

  • PenCom develops IT infrastructure for micro pension

    The National Pension Commission has developed the Enhanced Contributor Registration System (ECRS) to facilitate the enrolment of participants in the Micro Pension Scheme when the scheme is rolled out, the Commission’s Acting Director-General, Mrs. Aisha Dahir-Umar, has said.

    Dahir-Umar who spoke in Calabar said the ECRS was developed to clean-up data in the Contributory Pension Scheme (CPS).

    She stated that the clean-up will enable the Commission to not only facilitate the enrollment of participants in the Micro Pension Scheme, but to also facilitate the transfer of Retirement Savings Account (RSA) holders from one Pension Fund Administrator (PFA) to another.

    She stressed that the Micro Pension Scheme will take off fully once the ECRS is fully tested and deployed.

    She disclosed that the Commission released the guidelines on micro pension, the first step in giving effect to Section 2(3) of the Pension Reform Act (PRA), 2014, which provides that employees of organizations with less than three employees as well as the self-employed persons shall be entitled to participate in the CPS in accordance with the guidelines issued by the Commission.

    She said: “PenCom, in accordance with the PRA 2014, introduced the Micro Pension Plan. The plan is set to include the self-employed and persons working in organisations with less than three employees. It aims at ensuring that the informal sector participants save towards their old age. It is also expected that the plan would expand the coverage of pension contributors by an estimated 30 million people by the year 2024. This category of workers constitutes a large percentage of the working population in the country.

    “To implement this initiative, the Commission segmented informal sector into three broad categories namely; the low-income earners, the high-income earners and the small & medium scale enterprises (SMEs). Each of these categories will be targeted with appropriate pension products and sensitisation programmes that meet their various peculiarities.

    The Commission has recently exposed the draft guidelines and framework on Micro Pension Plan to its stakeholders and the general public for comments and observations and is on the verge of finalizing the guidelines and framework. In addition to the exposed draft guidelines and framework, the Commission is working on the IT infrastructure that will support the launch of the Micro Pension Plan.”

    She noted that due to the peculiarities of the informal sector, the Plan would be flexible! Safe, convenient and simple.

     

  • Micro pension: PenCom eyes 30m low earners, others

    • Explains reasons for suspending recruitment

    The micro pension plan is targeting about 30 million people, including low-income and high-income earners by 2024,  National Pension Commission (PenCom) Acting Director-General, Mrs Aisha Dahir-Umar has said.

    The Acting DG, who spoke at a seminar organised by Business Today Online in Lagos, said the Commission is also targeting the Small and Medium Scale Enterprises (SMEs).

    She said this category of workers constitutes a large percentage of the working population in the country.

    She disclosed that due to the peculiarities of the informal sector, the micro pension plan would be flexible, safe, convenient and simple.

    Mrs Dahir-Umar explained that the commission aims to introduce the micro pension plan in accordance with the Provisions of Section 2(3) of the Pension Reform Act (PRA) 2014.

    Highlighting the benefits of micro plan, she said that over time, old age poverty will decrease with the introduction because the informal sector worker would have saved for retirement while active.

    She said additional savings from micro pension would aid economic development and macro-economic stability through investment in infrastructure and financial markets.

    She added that it would also enhance pension coverage and improve Gross Domestic Product (GDP); while contributions will pass to the next of kin in case of contributor’s death.

    She, however, noted that despite the benefits of the plan, there are a few envisaged challenges that may hinder the smooth implementation of the micro pension plan in Nigeria.

    The Acting Director-General listed the challenges as financial illiteracy and low incomes in the country.

    She said: “Some of the low-income earners, who constitute the third segment of the informal sector, are mostly illiterate and thus, inexperienced with formal financial transactions and institutions.  Unlike the high-income earners that can deposit in lump sum, most low-income earners are daily wage workers and as such are unable to deposit large amounts.

    “The Micro Pension Plan refers to an arrangement for the provision of pension to the self-employed and persons operating in the informal sector. The Micro Pension Plan is also aimed at low-income earners who are often financially illiterate and usually have limited or no access to financial services.  It is also the sought-after solution to old age poverty as can be found in jurisdictions like India, Kenya and Ghana who have successfully implemented a Micro Pension Plan”.

    Speaking on the way forward, she said the Commission expects that the implementation of the micro pension will yield positive results for Nigerians and the pension industry.

    Meanwhile, Mrs. Dahir-Umar has explained the reasons for suspending the recruitment of 41 workers into the agency.

    According to her, the exercise which was scheduled to resume on May 2 last year, was suspended due to anomalies and irregularities discovered in the process.

    She said 41 candidates had been given employment letters after an interview which was cancelled over some irregularities.

    “Half of them were asked to resume on May 1 and the rest in June. The Federal Character Commission (FCC) gave certificate of “no objection” for the interview. The next step was for the Commission to request for Certificate of Compliance to give out letters of employment following the interview. While that was been awaited, the executive of PenCom was sacked. The DG as at the time quickly distributed the letters, without the certificate from FCC.

    “Meanwhile, the FCC in its letter authorising the interview had given two conditions. That the Commission must collect the required certificate before giving out employment letters and must use that recruitment to balance the lop-sidedness of staffing in the Commission.

    “When I resumed in April last year, our Human Relations department gave me a letter from the FCC suspending the resumption of those recruited. Based on that letter, I asked HR to meet with the FCC to find a way forward. The FCC advised that the exercise be suspended, that those affected should be informed and that they should be considered in subsequent recruitment exercises.

    “Every recommendation was followed to the later. We did try to get the National Assembly House Committee on Fededral Character to reconsider its stand through the House Committee on Pension and the Senate Committee on Establishment but both failed. Instead, a letter of reminder was sent to us on the suspension. The Commission was also invited and warned not to accommodate the new recruits due to irregularities of the exercise.

    “Every recommendation was followed to the later. We did try to get the House Committee on Federal Character to reconsider its stand through the House Com-mittee on Pension and the Senate Committee on Establishment. Both failed.”

  • PenCom eyes 10% pension assets’ contribution to GDP

    The National Pension Commission (PenCom) yesterday said it is putting in place measures that would raise the contribution of pension funds to the country’s Gross Domestic Product (GDP) from five per cent presently, to about 10 per cent by next year.

    The Acting Director-General of the Commission, Mrs. Aisha Dahiru-Umar, who stated this in a chat with  journalists yesterday in Abuja, said the cut of over N3 billion from the amount budgeted to offset the backlog of pension benefits to retirees by the National Assembly, is affecting the payment of accrued benefits to retirees from Ministries, Departments and Agencies (MDAs).

    The said the payment was meant for accrued benefits of the retirees in the MDAs, adding that the accrued rights were part of the pension benefits due to employees prior to the introduction of the Contributory Pension Scheme (CPS). Sais the CPS has facilitated a pool of pension funds that stands at N8.3 trillion as at June 2018.

    “As you have rightly noted, there are enormous potential for growth of Nigerian pension funds to account for a significant proportion of the GDP.

    “Indeed, the commission’s ongoing strategy implementation, aims at attaining an increase in the ratio of pension funds to GDP to at least 10 per cent by 2019,” Dahiru-Umar said.

    She said some of the measures being put in place to achieve the target, include firstly, the expansion of coverage of the CPS to the underserved economic sectors through micro pension and renewed enforcement of compliance.

    Mrs. Dahiru-Umar said: “Our objective in this direction is to attain at least 20 million contributors by the year 2019. Secondly, we seek to grow the assets through more investments in variable income instruments that generate higher returns.

    “In order to achieve this, we have 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 Pension Reform Act 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’s MDAs.”

    In addition, she said the commission has also intensified efforts at ensuring the payment of all outstanding pension liabilities, including accrued pension rights, and pension increases that were yet to be implemented.

    “The industry is already leveraging information technology (IT) to deliver better services to the contributors and retirees. The Pension Fund Administrators have been expanding their branch networks in order 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 in the federation. Other measures include a wider public enlightenment and education of the CPS in order to attract a wider participation,” he said.

     

    Meanwhile, Dahiru-Umar stressed that the cut of over N3 billion that was in the 2018 Appropriation Bill prior to its assent by the president would affect the payment of retirees’ benefits.

    She explained, “As at today, there are 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 so as to bring succour to teeming Federal Government’s retirees who are currently waiting for the payment of their retirement benefits.”

    She said the outstanding amount for Federal Government employees had been communicated to the government and in previous times, what was appropriated; it was short of the amount advised.

  • PenCom warns pensioners, others against graft

    • Lists ethical conduct as gain of pension reform

    The National Pension Commission (PenCom) has cautioned  the public, particularly pensioners and pension contributors, against giving kickbacks or other forms of gratifications to anybody to facilitate payment of retirement benefits, issuance of compliance certificate to vendors and service providers.

    PenCom Acting Director-General, Mrs Aisha Dahir-Umar, who made this call in a statement in Lagos, urged the public to immediately report to the Commission anyone who makes any demand or ask for any form of inducement in whatever disguise.

    According to her, the Commission remained dedicated to safeguarding pensioners, contributors’ rights and payment of retirement benefits as and when due.

    She further disclosed that one of the major achievements of the pension reform is the establishment of robust legal and institutional frameworks for pensions’ administration in Nigeria.

    She said: “One of the major achievements of the pension reform is the establishment of robust legal and institutional frameworks for the administration of pensions in Nigeria. The reform has instituted transparent processes in the operations of PenCom and the Pension Fund Administrators (PFAs) in the retirement benefits payment process, enforcement of compliance with the provisions of the Pension Reform Act (PRA) 2014 as well as other operations of the industry.

    “Consequently, the public is hereby invited to note that payment of retirement benefits under the CPS is made by the PFAs strictly from the Retirement Savings Accounts (RSA) of pension contributors. The RSA has three basic components, namely, the monthly pension contributions; the returns on investment earned for the contributors by the PFAs and the retirement benefits that accrued under the defunct Defined Benefits Scheme.

    “Section 7 of the Pension Reform Act 2014 and the Regulations on the Administration of Retirement & Terminal Benefits demand that the three components of the retirement benefit must be consolidated in the RSA before any payment is made by the PFA. Accordingly, payments of retirement benefits are made promptly into the bank accounts of the retirees except for cases where the employer delays in the release of funds to pay the accrued rights component of the retiree’s benefits.”

    She stressed that in the performance of its statutory mandate, the Commission issues compliance certificate to organisations wishing to bid for contracts with Federal Government institutions, pursuant to the requirement of the Public Procurement Act 2007.

    “Furthermore, as it is the case with all institutions, the Commission engages vendors and services providers from time to time. In addition to the legal safeguards and institutional checks and balances of the CPS, the Commission, as the regulator of all pension matters in Nigeria, has entrenched good corporate governance practices, high ethical standards and zero tolerance to any form of malpractice in the conduct of its staff and the PFAs that manage the pension assets. In this regard, the Management and staff of the Commission do not receive money or other forms of gratification to facilitate payment of retirement benefits, issuance of Compliance Certificates and engagement of vendors and service providers.

    “The Commission does not also give or accept kickbacks to or from any individual or organisation in the discharge its responsibilities. The members of the public, particularly pensioners and pension contributors are, therefore, reminded that no financial or other form of inducement should be given to anybody to facilitate payment of retirement benefits, issuance of compliance certificate or engagement as vendor or service provider.

    “Indeed, members of the public are earnestly requested to immediately report to the Commission, anyone who makes any demand for any form of inducement in whatever form or disguise. The Commission remains totally dedicated to the safeguard of your rights and payment of your retirement benefits as and when due,” she added.

     

  • PenCom begins verification of 2,700 retiring Fed Govt’s workers

    THE National Pension Commission (PenCom) yesterday began the verification and enrolment of over 2,700 employees of the Federal Government’s Ministries, Departments and Agencies (MDAs) from the Federal Capital Territory and Niger State that are treasury funded.

    Its Head, Corporate Communications, Peter Aghahowa, in a statement in Abuja, said the process, which is for payment of retirement benefits, also applies to those who have retired but were not enrolled.

    The statement reads: “The exercise is meant for employees in the service of the Federal Government, who are due to retire between January and December 2019 by virtue of attaining 60 years of age or 35 years in service, whichever is earlier or 65 years by age for employees of tertiary institutions or 70 years of age for professors.

    “Employees are requested to attend the enrolment exercise with the originals and copies of letter of appointment, evidence of transfer of service & acceptance where applicable, birth certificate/declaration of age, promotion letter and pay slip indicating grade level and step as at June, 2004, promotion letter and pay slip indicating grade level and step as at January 2007, promotion letter and pay slip indicating grade level and step as at July 2010, promotion letter and pay slip indicating grade level and step as at December 2013.

    “Other requirements for the enrolment exercise include letter of introduction from the MDAs, staff identity card, letter/evidence of retirement, where applicable, letter of indemnity from the MDA.”

  • PenCom begins verification of 2,700 retiring FG employees

    The National Pension Commission ( PenCom ) on Monday commenced the verification and enrollment of over 2,700 employees of the Federal Government’s Ministries, Departments and Agencies (MDAs) from the Federal Capital Territory and Niger state that are treasury funded.

    The Head, Corporate Communications, PenCom, Peter Aghahowa, disclosed this in a statement in Abuja.

    He said the process, which is for payment purposes of retirement benefits, also applies to those who have retired but are not enrolled.

    The statement reads: “The exercise is meant for employees in the service of the Federal Government who are due to retire between January and December, 2019 by virtue of attaining 60 years of age or 35 years in service whichever is earlier or 65 years by age for employees of tertiary institutions or 70 years of age for Professors.

    “Employees are requested to attend the enrolment exercise with the originals and copies of letter of appointment, evidence of transfer of Service & acceptance where applicable, birth certificate/declaration of age, promotion letter and pay slip indicating grade level and step as at June, 2004, promotion letter and pay slip indicating grade level and step as at January, 2007, promotion letter and pay slip indicating grade level and step as at July, 2010, promotion letter and pay slip indicating grade level and step as at December, 2013.

    “Other requirements for the enrolment exercise include letter of introduction from the MDAs, staff identity card, letter/evidence of retirement where applicable, letter of indemnity from the MDA.

    Read Also: Pencom begins verification exercise

    “The prospective retirees according to the statement are also requested to come with evidence of registration with a Pension Fund Administrator (PFA) indicating Retirement Savings Accounts (RSA) Personal Identification Number (PIN).

    “To ensure a successful and hitch-free exercise, the Commission requires the presence of at least, one Pension Desk Officer (PDO) from each MDA in order to assist in identifying potential retirees as well as confirm the authenticity of the documents presented by the employees.

    “Potential retirees who are medically unfit are exempted from the exercise but the Commission advises their Pension Desk Officers to come with their documents and a letter from a suitably qualified physician or medical board certifying that the affected employees are not physically or mentally capable of carrying out the functions of his/her office or attend the verification exercise.”

    The Commission advised all the prospective retirees of the government to take part in the exercise as it is a precondition for the payment of their retirement benefits.

    The exercise is part of the phase two of the nationwide programme which also ongoing in two other centers in Lagos and Ibadan. Phase one had already been concluded in 12 other centers across the nation.

    The exercise in Abuja is taking place between July 30, and August17, 2018.

  • PenCom enrols retiring Fed Govt employees in Lagos, Ogun

    •Pension fund assets hit N8.14tr

    The National Pension Commission (PenCom) has started verification and enrolment for employees of Federal Government Ministries, Departments and Agencies (MDAs) in Ogun and Lagos states.

    The exercise, meant for Federal Government employees, who are due to retire between January and December age next year, when they will attain 60 or 35 years in service; or 70 or 65 years in service for employees of tertiary institutions, is for the payment of their retirement benefits.

    PenCom’s Head of Corporate Communications, Peter Aghahowa, who spoke at the flag-off of the exercise at the University of Lagos (UNILAG), said the the enrolment also covered those who have retired, but are not yet enrolled.

    He called on employees to attend the exercise with the originals and copies of their letters of appointment, evidence of transfer of service and acceptance, birth certificate/declaration of age and promotion letter as at June 2004.

    Other requirements, for the exercise, according to him, include a letter of introduction from the MDAs,  staff identity card, letter or evidence of retirement, and a letter of indemnity from the MDAs.

    He said: “The prospective retirees are also requested to come with evidence of registration with a Pension Fund Administrator (PFA) indicating their Retirement Savings Accounts (RSA) Personal Identification Number (PIN).

    “To ensure a successful and hitch-free exercise, the Commission requires the services of at least, one Pension Desk Officer from an MDA to assist in identifying potential retirees as well as confirm the authenticity of the documents presented by the employees.

    “Medically unfit employees are exempted from the exercise, but the Commission advises the Pension Desk Officers to come with their documents and a letter from a suitably qualified physician or medical board certifying that the affected employees are not physically or mentally capable of carrying out the functions of his/her office.

    “The exercise at the University of Lagos is for Federal Government employees in Lagos and Ogun states, while the Ibadan Centre is for Federal Government employees in Oyo, Osun and Ondo states.

    ‘’Employees are, however, advised to take part in the exercise as only employees who have been enrolled will be issued with the Federal Government Retirement Bond. The exercise in the Southwest is taking place between July 30, and August 17,” he added.

    Meanwhile,  PenCom has recorded a total pension fund assets of N8.14 trillion as at last May.

    This was shown in the Commission’s monthly report.

    According to PenCom, Retirement Saving Account (RSA) retiree fund stood at N619.59 billion; RSA active fund, N5.51 trillion; Closed Pension Fund Administrators fund, N1.08 trillion and Approved Existing Schemes (AES) N9.26.85 billion.

    PenCom said 70.08 per cent of the N8.14 trillion pension assets was invested in Federal Government’s securities, which amounted to N5.71 trillion.

    A breakdown of the investment showed that Federal Government Bonds got N3.96 trillion; Treasury Bills, N1.68 trillion; Agency Bond (NMRC & FMBN) N6.54 billion; Sukuk Bonds, N51.98 billion and Green Bonds, N8.26 billion.

    State government securities were N154.02 billion; corporate bonds, N393.27 billion; corporate infrastructure bonds, N8.36 billion; banks, N662.80 billion; commercial papers, N71.75 billion and estate properties, N228.86 billion.

    Other classes of assets include supra-national bonds, N8.21 billion; open/close end funds, N10.16 billion; mutual funds, N1987 billion; private equity fund N3727 billion; infrastructure fund, N8.95 billion and cash and other assets N96.13 billion.