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Tag: PenCom

  • PenCom to unveil micro pension for celebrities, tailors, others

    PenCom to unveil micro pension for celebrities, tailors, others

    •’Old age poverty may increase’ 

    It is time to bring on board the self-employed including celebrities,  artisans, traders, plumbers, hairdressers, tailors, vulcanizers, food vendors, Okada/Keke riders, among others into the Contributory Pension Scheme (CPS) through micro pension, Director-General of the National Pension Commission (PenCom), Mrs. Chinelo Anohu-Amazu has said.

    PenCom also highlighted the need for adoption of pension scheme by the big and small players in the informal sector, noting that study showed that old age poverty will be on the increase following failed family support system in Nigeria and current unemployment rate in the country. As a result of the development, few parents will depend on children at old age while individuals with no pension plan will retire to old age poverty.

    The Director-General represented by the Head, Micro Pensions Department of PenCom, Polycarp Anyanwu, made this known while speaking with reporters in Lagos. She said the micro pension’s guideline, which will soon be unveiled by the Commission has captured these categories of people in the informal sector, noting that among them are  low, middle and high income earners.

    According to her, the informal sector represents 70 per cent of Nigeria’s total working population hence the target of the Commission to extend coverage to a total of 20 million Nigerians by 2019 and 30 million by 2024.

    She stressed that pension funds have grown by over 300 per cent in 10 years while coverage of the working population by the scheme is growing in the public and private sectors.

    She said: “The number of registered contributors was 7.01 million as at March, 2016 representing about 6.9 per cent of total labour force in Nigeria and four per cent of total population.

    “Public sector represents 47 per cent while private sector represents 53 per cent. In the same vein, 26 states have adopted the scheme and are at different stages of implementation, the informal sector is largely uncovered by the scheme and represents about 70 per cent of Nigeria’s total working population. Therefore, there is a need for an expanded coverage.”

    Explaining the rationale for expanding coverage to the informal sector, Anohu-Amazu said study has shown that old age poverty will increase with the current unemployment rate in the country.

    She also said that failed family support system in Nigeria implies that few parents will depend on children at old age while individuals with no pension plan will retire to old age poverty.

    She noted that given the importance of pension as a safety net, there is the need to develop urgent solutions to enable active participation in the informal sector.

    Anohu-Amazu said micro pension is a long term voluntary financial plan for the provision of pension coverage to the self-employed, persons working for organisations with less than three employees and the informal sector workers.

    She noted that micro pension is a pension industry strategic initiative to have an inclusive and expanded coverage. Micro pension has been implemented in India, Kenya, Ghana and other countries.

  • PenCom partners FMDQ for improved governance

    PenCom partners FMDQ for improved governance

    The Regulatory Supervision Collaboration Agreement signed by the National Pension Commission and the FMDQ OTC Securities Exchange  will enable the realisation of PenCom’s investment objectives of safety of pension assets and maintenance of fair returns on investment, Director-General of PenCom, Mrs. Chinelo Anohu-Amazu has said.

    The PenCom boss who made this known while speaking to reporters in Lagos reiterated that the agreement executed with the Exchange is part of efforts geared towards the realisation of its corporate vision and agenda.

    She said based on this, FMDQ has formalised its partnership with the Commission and commended FMDQ on its positive impact and giant strides in the development of the Nigerian Financial System.

    The Managing Director, FMDQ, Bola Koko said the partnership will seek to achieve, among other things the Commission’s objectives as outlined in the Pension Reform Act, 2014, through data access and visibility of its supervisees’ –  Pension Fund Administrators (PFAs)) transactions on FMDQ.

    It will also improve transparency of all PFAs’ transactions in the Nigerian fixed income market as well as the money market through the applicable systems; capacity building sessions for relevant PenCom staff on the use of the applicable systems; and the development of performance benchmarks for fixed income asset classes: bonds (sovereign, sub-national and corporate), money market securities (treasury bills, commercial papers, among others) and fixed deposits.

    FMDQ Chairman represented by Independent non-Executive Director at FMDQ, Ms. Daisy Ekineh said the event marks the formalisation of a partnership expected to be formidable and long-standing, as it will bring about integrity of service, assured investor protection and fair return on investments.

    She said: “It will also serve to fundamentally change the way in which our financial markets operate to the benefit of the nation’s investors, in particular, the pension assets, and ultimately the Nigerian economy.

    “FMDQ, in its unwavering commitment to support efforts to galvanise the development of the Nigerian economy remains resolute in promoting an efficient, transparent and well-regulated financial market, which will attract and retain domestic and foreign investors.

    “PenCom, via this agreement, will be conferred membership of FMDQ as an Affiliate Member (Regulators), providing the Commission with benefits including, but not limited to data access and market visibility rights over the market activities of the Commission’s supervisees within FMDQ and access to real-time pre- and post-trade prices on fixed income securities.

    “For PenCom, the regulator and supervisor of the Pension Industry in Nigeria, this partnership which would allow it online real time access to FMDQ’s trading system, will among other things promote increased transparency in trades, efficient pricing of transactions, higher professionalism of players in the fixed income markets and fair returns on pension fund investment, for the ultimate benefit of pension contributors and the Nigerian economy at large.”

     

    Present at the ceremony were the Director-General of PenCom, Mrs. Chinelo Anohu-Amazu, Chair, Board Regulation and Risk Management Committee, FMDQ, represented by Ms. Daisy Ekineh, FMDQ, Managing Director/CEO, Mr. Bola Onadele Koko, representatives of the Central Bank of Nigeria Banking Supervision and Financial Markets Departments and other from FMDQ and PenCom.

  • PenCom commissioner dies

    PenCom commissioner dies

    The National Pension Commission (PenCom) has announced the death of its commissioner, Finance Division, Prince Adesoji Olaoba-Efuntayo.

      A statement by the commission’s Head of Communication,  Emeka Onuora, said its director-general, Mrs. Chinelo Anohu-Amazu, confirmed that Olaoba-Efuntayo died at the age of  58 following a brief illness.

     Mrs.  Anohu-Amazu, who commiserated with the family of the late commissioner,  stated that the board, management and workers of the commission would miss him.

    She prayed that God should grant Olaoba-Efuntayo’s family, his friends and relatives the fortitude to bear the loss.

    The statement described the deceased as “a seasoned professional, who was appointed as commissioner in PenCom by the Federal Government in 2014”.

    “Before then, he was chairman of Ife North Local Government Area, Osun State and a former Special Adviser on Youth and Sports to former Governor  Olagunsoye  Oyinlola. Prince Olaoba-Efuntayo was also a member of various professional bodies, among them, the Nigerian Institute of International Affairs and the Nigerian Bar Association (NBA).”

     He is survived by his wife, Mrs. Adewola Olufunke Mary  Olaoba-Efuntayo, children and grandchildren.

  • PenCom, FMDQ sign deal for improved governance 

    PenCom, FMDQ sign deal for improved governance 

    FMDQ OTC Securities Exchange has entered into Regulatory Supervision Collaboration Agreement with the National Pension Commission (PenCom). 

    In a statement yesterday,  PenCom Director-General, Mrs. Chinelo Anohu-Amazu, said the agreement would enable the realisation of PenCom’s investment objectives of pension assets and maintenance of fair returns on investment (RoI).

    Chair, Board Regulation and Risk Management Committee, FMDQ, represented by independent non-executive Director, Ms. Daisy Ekineh, its Managing Director/CEO, Mr. Bola Onadele and representatives of the Central Bank of Nigeria (CBN) Banking Supervision and Financial Markets Departments and other key representatives from FMDQ and PenCom.

    Mr. Onadele said the partnership “will seek to achieve, among other things the Commission’s objectives (as outlined in the Pension Reform Act, 2014), through data access and visibility of its supervisees’ (Pension Fund Administrators (PFAs)) transactions on FMDQ; improved transparency of all PFAs’ transactions in the Nigerian fixed income market, as well as the money market through the applicable system(s); capacity building sessions for relevant PenCom staff on the use of the applicable system(s); and the development of performance benchmarks for fixed income asset classes: bonds (sovereign, sub-national and corporate), money market securities (treasury bills, commercial papers and others) and fixed deposits.”

  • PenCom chief recounts journey to pension reform

    The journey to pension reform in 2004 sprang from the realisation of pension deficit of about two trillion naira in the country, the Director-General, National Pension Commission, Mrs Chinelo Anohu-Amazu, has said.

    She made this known while reliving her sojourn into the pension industry to reporters in Lagos. She expressed joy that the reform has been able to wipe off the deficit accumulating a total of N6.3 trillion pension assets under the Contributory Pension Scheme (CPS).

    She said: “We started this journey about 13 years ago, when I was working in the Bureau of Public Enterprise (BPE) and every enterprise we wanted to sell had a pension deficit.

    “All the investors said it was either we excised the pension deficit or sold the companies for a pittance. So, the then Director-General of BPE, Mallam Nasir El-Rufai decided that we had to find a solution. It was at his insistence that together with the then President Olusegun Obasanjo, the pension initiative was born.

    “There had been other efforts. So many people tried and proffered different things and the Fola Adeola Committee’s mandate was to collate all these efforts and synthesise them into one workable solution. We took it to President Obasanjo, and given his own stance, he pushed the reforms through. And that is when we had the 2004 Act that culminated into the setting up of the pension institution and the pension commission as a regulato.”

    Mrs Anohu-Amazu noted that pension and related issues after the reform had received significant attention with the aim of solving the myriad of challenges bedevilling the retirement benefit system in the country.

    She explained that the public sector scheme became unsustainable due to lack of adequate and timely budgetary provisions and increases in salaries and pensions.

    “There were demographic shifts due to rising life expectancies, which was a phenomenon that affected the family support ratio. In addition, pension administration had been largely weak, inefficient, less transparent and cumbersome.

    “The private sector schemes, which were largely akin to the Provident Fund Schemes, had been characterised by very low coverage and compliance ratio due to lack of effective regulation and supervision.  This resulted in complete paradigm shift from the Defined Benefits Schemes as operated by both the public and private sectors to the CPS,”she noted.

  • Guidelines must be met on N5.13t pension fund deployment, says PenCom

    Guidelines must be met on N5.13t pension fund deployment, says PenCom

    For the N5.31 trillion pension fund to be invested in infrastructure and other projects, the terms on investment guidelines must be strictly adhered to, Director-General of the National Pension Commission (PenCom), Mrs Chinelo Anohu-Amazu has said.

    She made this known at a media parley in Lagos.

    She noted that all pension funds are invested according to the industry’s investment guidelines noting that the Commission and pension operators would not bend the rules to please anybody.

    She stressed that the industry is willing to invest in infrastructure and other projects.

    She urged those agitating for the deployment of pension funds to understand that the funds are held in trust for workers who definitely get their contributions at retirement, hence all investment are done with the workers in mind.

    She called on investors seeking the funds to tailor their proposals in line with the investment guidelines to enable them access them.

    She said the industry’s investment guidelines specified how the funds are to be invested, stressing that some investors do not get funds from the industry because they fail to meet the requirements in the guidelines.

    She also reiterated that the funds are not idle in any bank account as alleged by those who do not understand the working of the Contributory Pension Scheme (CPS).

    Anohu-Amazu also spoke on unpaid accrued rights which is preventing some retirees from getting their pension.

    She noted that the Federal Government is yet to pay N20 billion outstanding accrued rights of 2015, stressing that the non-payment is responsible for the delay in paying some retirees.

    She urged the government to prioritize pension so as to sustain the confidence already built in the 12 years existence of the scheme.

    On micro pension, she said the commission was working assiduously to ensure that all necessary requirements are in place for a smooth commencement of the initiative.

    She said: “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 of creating the enabling environment and buy-in.

  • PENCOM to extend coverage to Informal Sector

    PENCOM to extend coverage to Informal Sector

    The National Pension Commission (PENCOM) on Friday gave the assurance that it was ready to cover the outstanding 60 per cent of the populace in its micro-pension scheme, to secure the future of informal sector employees.

    Mrs. Chinelo Anohu-Amaizu, the Director-General of the commission, said this while answering questions from reporters in Lagos.

    According to Anohu-Amaizu, PENCOM will collaborate with groups such as Organised Labour, Civil Society groups, Road Transport workers and others, to achieve the objective.

    She said that people in the informal sector of the economy needed to be captured in the scheme, to guarantee some steady income for them in their post-work era.

    “The micro-pension scheme is ready to capture even people in Nollywood and the music sector. When some actors or musicians are no longer performing, they find it difficult to be able to live well.

    “People in the entertainment industry earn millions today, but many of them may have no plans for the rainy day. Which explains why it is pertinent to capture them in the micro-pension scheme,’’ she said.

    The PENCOM chief stressed that the informal sector employees must, however, be ready to save some money for the future, adding that the country was now encountering problems with earnings from oil because it did not leave money in the reserves during the oil boom era.

    She said that the commission had started sensitising workers in the textile industry on the issue and that it also had plans to extend the initiative to the road transport workers.

    “We have identified the groups to work with. We will soon begin sensitisation for the workers to enable them to understand the importance of what they are going into, before we will start the scheme,’’ she said.

    Anohu-Amaizu, however, disclosed that the commission’s contributory pension scheme had so far harnessed about N5.3 trillion which was safely invested, stressing that PENCOM’s activities were governed by its enabling law.

  • N5tr pension funds: Reps, PenCom, PFAs to discuss infrastructure investment

    N5tr pension funds: Reps, PenCom, PFAs to discuss infrastructure investment

    The House of Representatives  has mandated its committees on Pensions, Finance and Capital Market institutions to interface with the Nigerian Pensions Commission (PenCom) and other stakeholders  on the viability of investing part of the N5trillion idle  pension funds in infrastructural facilities.

    The resolution of the House was an offshoot of a motion sponsored by a member, Yusuf Tajudeen, yesterday.

    The motion was passed with dissent from some members.

    While arguing the motion, Tajudeen said there is growing concern over infrastructural decay in all sectors of the country as a result of neglect, ineptitude and lack of planning by successive governments.

    He said the dearth of infrastructure is having far-reaching consequences on the economy of the country.

    He said: “In over one decade of the implementation of the Pension Reform Act, the National Pensions Commission has accumulated about N5 trillion which is mainly in the vaults of commercial banks as free funds characterised by low investment returns and sharp practices by various Pension Funds Administrators (PFAs).”

    According to him, in most countries in Europe, Asia and America, pensions funds are usually invested in the provision of infrastructure as a means to regenerate the funds, grow the economy, sustain meaningful development and met the needs of the citizenry.

    He expressed concern that the consequences of taking  offshore loans and facilities to address the infrastructure needs of Nigeria will, in the long run, bring colossal damage to the economy.

    “The huge infrastructural deficit in all sectors of Nigeria’s economy cannot be achieved through budgetary allocations alone, thus, if no concrete and pro-active investment strategies are put in place to comprehensively address these infrastructural challenges, the nation may be thrown into deeper economic crisis,” he said.

    However, Hon. Pally Iriase and Hon. Lawal (Yobe North/South) sounded a note of caution on the issue.

    Iriase said there is need to be careful so that wrong decisions that would be regretted in the future would not be made on the issue.

    Lawal said members should take cognisance of the fact that already, there is over N80 billion non-performing loans problem in the country and it would be sad if the pension fund becomes a part of that.

    According to him, there might be a scenario in which the retirement benefits of pensioners may not be paid as in the past because of bad investment decisions.

  • PenCom recovers N10b pension contribution

    PenCom recovers N10b pension contribution

    •Commission to audit firms

    The National Pension Commission (PenCom) has recovered over N10 billion unremitted pension contributions in principal and interest penalty, The Nation has learnt.

    It was also learnt that the Commission would soon begin pension audit of the books of over 200,000 existing employers in the country to determine those who failed to remit the mandatory 18 per cent pension contributions of workers to their Retirement Savings Account held by their respective Pension Fund Administrators (PFAs).

    Section 3 subsection (1) of the Pension Reform Act (PRA) 2014 states that there is  an established law for any employer in the Federal Republic of Nigeria, to have a Contributory Pension Scheme (CPS) for payment of retirement benefits of employees to whom the scheme applies under the Act.

    Section 4 subsection (1) states that the contribution for any employee shall be a minimum of 10 per cent by the employer and a minimum of eight per cent by the employee.

    Section 11 subsection (1) states that every employee shall maintain a Retirement Savings Account (RSA) in his name with any PFA of his choice.

    Subsection (3) states that the employer shall deduct at source the monthly contribution of the employee; and not later than seven working days from the day the employee is paid his salary; remit an amount comprising the employee’s contribution and the employer’s contribution to the Pension Fund Custodian specified by the PFA of the employee.

    PenCom Head, Compliance and Enforcement, Alhaji Umar in an interview with The Nation, said the commission decided to set up the pension audit system to complement its ongoing processes of ensuring compliance by employers in the country.

    The processes according to him, include engaging employers through warning letters, imposing two per cent monetary penalty on unremitted contributions, naming and shaming of erring employers and seeking litigation against them.

    Umar disclosed that the commission will engage accountants and other professionals who have worked in regulatory or banking sector to carry out pension audit on the books of organisations.

    This, he said, will be done on a frequency of three to four years.  He said: “We are still following through our process of compliance starting from engaging employers through warning letters, imposing two per cent monetary penalty on unremitted contributions, naming and shaming of erring employers and seeking litigation against them. This is the process we follow for any employer we find not to be complying with the provision of the Pension Reform Act. The Act provides for a two per cent increase penalty for late remittance.

    “Part of our processes of enforcing compliance is the appointment of recovery agents to recover unremitted pension contribution from the private sector. The agents mostly lawyers and accountants do a pension review of employer’s compliance level and where they find that they are not complying fully, they determine the outstanding in terms of principal contribution and also penalty as the act provides for. Presently, we are in the process of writing some employers letters. Some are at the level of receiving warning letters, some at the level of imposing monetary penalty while we drag some to the court.

    He added:’’From our database, we have over 200,000 employers and some are portfolio employers. Based on our pension submission framework, PFAs render returns on monthly basis and they tell us who is remitting and who is not remitting contributions. We have consolidated that and we have number of those that are not remitting.

    On the need for pension audit  he said:“Presently, we are planning on pension audit on yearly basis. Auditors will specifically carry out a pension audit on the accounts of companies in terms of pension compliance. Any employer who has not remitted for a period will be identified and will be made to pay the penalty. The numbers are huge and it will take time to go round all of them.

    He spoke about plans to  make the audit frequent saying: “We are planning of making the frequency of the audit to be between three or four years. This is because we are dealing with over 200,000 employers and to audit them every year will be to audit 200,000 companies. This will not be possible because even Nigeria does not have the capacity in terms of available accountants or professionals who have worked in regulatory or banking.

    “Despite these challenge, there is also the issue of cost because you have to pay them to do the work. So we say assuming we audit them in batches per annum on a frequency of three or four years which means that we will come back to each company around this period.

    ‘’We also receive complaint or request to investigate some companies and we invite anti-corruption agencies like the Economic and Financial Crimes Agency, Independent Corrupt Practices Commission and the Code of Conduct Tribunal.

  • PenCom recovers N10b pension contribution

    PenCom recovers N10b pension contribution

    •Commission to audit firms

    The National Pension Commission (PenCom) has recovered over N10 billion unremitted pension contributions in principal and interest penalty, The Nation has learnt.

    It was also learnt that the Commission would soon begin pension audit of the books of over 200,000 existing employers in the country to determine those who failed to remit the mandatory 18 per cent pension contributions of workers to their Retirement Savings Account held by their respective Pension Fund Administrators (PFAs).

    Section 3 subsection (1) of the Pension Reform Act (PRA) 2014 states that there is  an established law for any employer in the Federal Republic of Nigeria, to have a Contributory Pension Scheme (CPS) for payment of retirement benefits of employees to whom the scheme applies under the Act.

    Section 4 subsection (1) states that the contribution for any employee shall be a minimum of 10 per cent by the employer and a minimum of eight per cent by the employee.

    Section 11 subsection (1) states that every employee shall maintain a Retirement Savings Account (RSA) in his name with any PFA of his choice.

    Subsection (3) states that the employer shall deduct at source the monthly contribution of the employee; and not later than seven working days from the day the employee is paid his salary; remit an amount comprising the employee’s contribution and the employer’s contribution to the Pension Fund Custodian specified by the PFA of the employee.

    PenCom Head, Compliance and Enforcement, Alhaji Umar in an interview with The Nation, said the commission decided to set up the pension audit system to complement its ongoing processes of ensuring compliance by employers in the country.

    The processes according to him, include engaging employers through warning letters, imposing two per cent monetary penalty on unremitted contributions, naming and shaming of erring employers and seeking litigation against them.

    Umar disclosed that the commission will engage accountants and other professionals who have worked in regulatory or banking sector to carry out pension audit on the books of organisations.

    This, he said, will be done on a frequency of three to four years.  He said: “We are still following through our process of compliance starting from engaging employers through warning letters, imposing two per cent monetary penalty on unremitted contributions, naming and shaming of erring employers and seeking litigation against them. This is the process we follow for any employer we find not to be complying with the provision of the Pension Reform Act. The Act provides for a two per cent increase penalty for late remittance.

    “Part of our processes of enforcing compliance is the appointment of recovery agents to recover unremitted pension contribution from the private sector. The agents mostly lawyers and accountants do a pension review of employer’s compliance level and where they find that they are not complying fully, they determine the outstanding in terms of principal contribution and also penalty as the act provides for. Presently, we are in the process of writing some employers letters. Some are at the level of receiving warning letters, some at the level of imposing monetary penalty while we drag some to the court.

    He added:’’From our database, we have over 200,000 employers and some are portfolio employers. Based on our pension submission framework, PFAs render returns on monthly basis and they tell us who is remitting and who is not remitting contributions. We have consolidated that and we have number of those that are not remitting.

    On the need for pension audit  he said:“Presently, we are planning on pension audit on yearly basis. Auditors will specifically carry out a pension audit on the accounts of companies in terms of pension compliance. Any employer who has not remitted for a period will be identified and will be made to pay the penalty. The numbers are huge and it will take time to go round all of them.

    He spoke about plans to  make the audit frequent saying: “We are planning of making the frequency of the audit to be between three or four years. This is because we are dealing with over 200,000 employers and to audit them every year will be to audit 200,000 companies. This will not be possible because even Nigeria does not have the capacity in terms of available accountants or professionals who have worked in regulatory or banking.

    “Despite these challenge, there is also the issue of cost because you have to pay them to do the work. So we say assuming we audit them in batches per annum on a frequency of three or four years which means that we will come back to each company around this period.

    ‘’We also receive complaint or request to investigate some companies and we invite anti-corruption agencies like the Economic and Financial Crimes Agency, Independent Corrupt Practices Commission and the Code of Conduct Tribunal.