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Tag: PenCom

  • PenCom, PFAs, PFCs brainstorm

    THE National Pension Commission (PenCom), managers and custodian of the N5.15 trillion pension fund, have held a two-day pension retreat to deliberate on the way forward for the industry.

    PenCom Director-General, Mrs. Chinelo Anohu-Amazu, said the focus of the retreat tagged, “Nigerian 2015 Pension industry retreat” was the development of the implementation plan for the 2014-2024 strategy developed at the last retreat.

    According to her, the objective for the Commission, the Pension Fund Administrators (PFAs) and Pension Fund Custodian (PFCs) is to facilitate the development and validation of implementation plans for five strategic themes of the industry.

    The themes include excellence in service delivery, inclusive and expanded coverage, low cost and efficient industry, positive real returns and visible impact and professional and qualified human capital.

    She said the leaders discussed actions, projects, resource requirement, milestone and details for each strategic theme.

    She said they would plan the implementation team for each project and on resources, including human capital, financials, among others.

    Also, they agreed, she said, on the monitoring and evaluation process, such that the next retreat would include performance review on progress to be made.

    The discussion, she pointed out,  considered the output of last year’s World Pension Summit-Africa Special.

  • Fashola to PENCOM: invest N5tr pension fund in real sector

    Fashola to PENCOM: invest N5tr pension fund in real sector

    Minister of Power, Works and Housing Babatunde Fashola has urged the National Pension Commission (PenCom) and other operators to invest the over N5 trillion pension fund in construction of infrastructure.

    He mentioned such infrastructure as roads, housing, Fourth Mainland Bridge, coastal road linking several coastal states from Lagos to Bayelsa and the new seaports in Lekki and Badagry.

    The minister spoke in a keynote speech at the Nigerian Pension Industry Strategy Implementation Roadmap Retreat organised by the National Pension Commission (PenCom) and pension operators at the weekend in Abuja.

    His paper was titled: “Overcoming the Challenges and Managing the Risks and Constraints that Inhibit the Investment of Private Capital and Funds in Nigeria’s Infrastructure Landscape to Make a Visible Economic Impact”.

    He also recommended investment of the fund in refineries, such as Dangote’s, Ajaokuta Steel, petrochemical plants, resuscitation of textile mills; prisons to strengthen justice system and decongest prisons; hostels for universities, power plants for universities, especially those with teaching hospitals, health care and others.

    To sceptics, who may be scared to invest pension assets in the real sector, Fashola said “diversification has forced itself on us as a nation and those investible vehicles exist”.

    The minister said he could see a future of Africa, where Nigeria is leading in the use of people’s resources to build a future that includes the people.

    He said he developed a topic from the challenges encountered by the pension regulator and operators in finding suitable investable vehicles to invest.

    Fashola noted that the risks that stand in the way of the pension managers in investing the fund without any hitch were caused by some businessmen, who for their selfish reasons ensured that projects and contracts were tied down in courts.

    He identified five areas that needed to be addressed to assure investors of low induced risks and these included politics, government’s action, socio-cultural, legal and judicial factors.

    He stated that while the journey of a new pension system started with the coming together of some Nigerian minds like President Olusegun Obasanjo and Fola Adeola and was nurtured by the dedicated hands of men and women, it has reached a major milestone from where it must reinvigorate itself.

    The minister, who said it was time to invest in the real sector, added that the biggest opportunity presented itself for the nation to act towards diversification rather than sloganeering it.

    Fashola, who lamented infrastructure deficit in Africa, said: “This is the time to show that our nation and our national economy is bigger than the challenges posed by dwindling oil prices. This is the time to diversify and change the face of our economy. But the risks that stand in the way of investing the fund are caused by us and they must be changed by us.

    “Perhaps, the appropriate starting point will be to acknowledge that pension reforms are just beginning to gain a foothold across most of Africa in jurisdictions as Nigeria, Ghana, Botswana, Kenya and Uganda, to mention a few.

    “Perhaps the biggest and most advanced of the pension funds, especially in sub-Saharan Africa is the South African Pension Fund. But while the sizes of these funds are happily growing, and the number of contributors increasing, the impact in the quality of life on the continent is not yet anywhere near minimum globally acceptable standards.”

    The minister advocated the adoption of a collective national attitude to make it possible to invest the over N5 trillion  fund constituting the contributions of the nation’s working class into real sectors as a means of diversifying  the nation’s economy and achieving inclusive growth.

    He noted that the attitude that once mired pension funds management in scandals and lack of transparency, had led to stringent legislative interventions that limited the scope of activities that pension funds could participate.

    Fashola acknowledged the amendments being made to address the situation.

  • Un-credited contributions major challenge, says PenCom

    The issue of un-credited contributions as a result of contributions without appropriate schedules from employers in the pension industry remains a major challenge for the National Pension Commission (PenCom) and the Pension Fund Administrators (PFAs), PenCom has said.

    In a report made available to The Nation, PenCom stated that the major challenges are the contributions that are being remitted through the electronic payment platform as well as contributions that came in at the commencement of the Contributory Pension Scheme (CPS), which are currently being investigated and reconciled.

    The Commission said: “In-spite of these challenges however, significant inroads have been made towards forestalling this incidence.  The industry has established the Electronic Pension Contribution Collection System (EPCCOS), which is a payment platform specifically designed for employers to remit the pension contributions of their employees.

    “The platform, which currently has a capacity for 20, 000 employers, is designed to only accept remittances that are made with their accompanying schedules. The platform, which was launched on 27 May, 2015, is so far only designed to receive remittances from the private sector and has 800 registered employers as at 31 July 2015 of which 196 have been making steady monthly contributions, with 1,400 payments schedules received on a monthly basis across the PFAs.

    The Commission said the module that will accept all other types of remittances including those of the public sector is currently being worked on and will be concluded by the end of August.

  • Pension contributions hit N5 trillion,says PENCOM

    Pension contributions hit N5 trillion,says PENCOM

    The National Pension Commission (PENCOM) said yesterday that pension contributions under the Contributory Pension Scheme has risen to about N5 trillion.

    Director General of the Commission, Chinelo Anohu-Amazu who stated this at the 10th anniversary lecture of Trust Fund Pension Plc in Abuja, added that there are  plans by the commission to extend the contributory Pension scheme to the informal sector of the economy.

    Represented by the Commissioner in charge of Inspectorate at the Commission, Prof. Mohammed Kaoje Abubakar, the Director General said the sustainability of the Contributory Pension scheme is very important, pointing out that the commission wants to free the scheme of the problems of defined benefit scheme which it replaced.

    She said to ensure sustainability, the scheme must provide improved service delivery so that there can be internal efficiency, while the Pension Fund Administrators and the regulators must be open in their dealings.

    She also said  there are plans to ensure that contributors can migrate from one PFA to the other if one is not performing to their expectations, stressing that there must however be strict compliance to service standard.

    President of the Nigeria Labour Congress (NLC), Comrade Ayuba Wabba lamented that 10 years after the introduction of the Contributory Pension Scheme as part of Pension Reform in the country, only ten states are fully participating in the scheme.

    Wabba who was represented by Deputy President of Congress, Peters Adeyemi, however want issues of pensions taken away from the states and local government, while advocating that the contributory pension scheme be extended to states and local government areas.

    He said: “Though the 2014 amendment to the Pension Reform Act ratified the omission in the 2004 Act, the fact that only 10 states out of 36 states have completed the process of legislation and full contributory schemes are in place as at the last quarter of 2015, shows the effect of the non-inclusion of states in the  reforms,

    “The current fate of states civil servant who are being owed several months of pension arrears, some up to 12 months and more, underscores the urgent necessity to bring this category of public servants on board the scheme.

    “While the 2014 amendment Act addressed a number of areas of challenge to the success of pension reforms in the country, such challenge like knowledge gap and misinformation regarding the operations of the pensions scheme and the implementation of the contributory pension scheme still persist, 10 years into its operations.

    “The perception about a pension scheme that is riddled with fraudulent  practice is still very rife in public consciousness”.

    He noted that the perception is not helped with the report about pension scams running into several billions.

    He said the congress was in the process of establishing a pension desk at the headquarters and again the various industrial unions to work with Trust Fund a Pension and PenCom and as well as expand the scope of work and understanding on pension related matters.

  • PenCom urges governors to eschew pension liabilities, join CPS

    PenCom urges governors to eschew pension liabilities, join CPS

    The embrace of the Contributory Pension Scheme (CPS) by states is one effective tool of managing finances by paying monthly pension contributions into employees’ retirement savings accounts (RSAs) as opposed to settling huge liabilities at retirement, like the Defined Benefit Scheme (DBS), Director-General, National Pension Commission (PenCom), Chinelo Anohu-Amazu has said.

    Speaking at a Stakeholders’ Sensitisation Conference, Northwest Zone on Pension Reform Act (PRA) 2014 organised by the Commission in Kaduna with: The Pension Reform Act, 2014 – Innovations and improvements to Nigeria’s pension sector, as its theme, she said only three states in the zone, including Kaduna, have commenced implementation of the CPS. She appealed to all the states and local governments areas in the zone that are yet to adopt or implement the CPS to immediately comply.

    According to her, this is in order to avail their employees of the numerous benefits of the scheme, while avoiding future pension liabilities.

    She said the need for more efficiency in managing finances has never been greater than now, given the lean available public resources.

    She noted that many states in the federation have adopted the CPS and are at various stages of its implementation.

    According to her, the PRA 2014 gives additional impetus for participation in the CPS by prescribing the coverage of states and local government employees, in addition to the Federal Public service and private sector.

    She further stated that the PRA 2014 re-enacted the fundamental provisions of the repealed PRA 2004.

  • N3.89tr funds: PenCom urges state governments to join CPS

    N3.89tr funds: PenCom urges state governments to join CPS

    The National Pension Commission has advised state governments that are yet to join the Contributory Pension Scheme (CPS) to do so to enable them benefit from the N3.89 trillion pension fund available for infrastructure and housing as at September this year.

    Its Director-General, Mrs. Chinelo Anohu-Amazu gave this advice while briefing the National Executive Council (NEC) at the Presidential Villa on the level of state government compliance with the scheme. In attendance were the 36 state governors of the federation  at the briefing chaired by Vice President, Prof Yemi Osinbajo.

    She however identified funding challenges, non-enactment of pension laws and resistance by state officials on consolidated salaries as major challenges and issues that must be dealt with to enable the states implement the CPS and comply with the Pension Reform Act (PRA) 2004 repealed by PRA 2014.

    She said other problem facing the states in the implementation of the CPS are the resistance by the organised labour due to low pension pay-out and absence of credible payroll.

    Anohu-Amazu who said the pension funds as at September stood at N5.103trillion noted that N3.899 trillion remains untapped potential available for infrastructure and housing.

    She listed process for accessing the funds for infrastructure as full implementation of the CPS and execution of Irrevocable Standing Payment Order (ISPO) to the Accountant-General of the Federation to deduct pension contributions and funding for accrued rights at source.

    She further said opportunities for states to join the CPS also include access to available RSA funds for infrastructure which she described as an efficient avenue for financing states’ long term borrowing needs such as corporate bonds.

    It also include access to RSA balances for affordable housing schemes by state employees, she added.

    She noted that pension assets totaling N160 billion have so far been invested in state bonds towards infrastructure development.

    She called on states to take steps towards full implementation of the CPS.

    She said: “States should begin to take steps towards full implementation which include urgent enactment of State Pension Laws, establishment of State Pension Bureux to drive implementation of the CPS; commencement of actuarial valuation to determine accrued rights of employees; opening of RSA for eligible employees and issuance of retirement benefit bonds to eligible employees.

    “Others are opening of Retirement Benefit Bond Redemption Fund Account (RBBRFA) with either the Central Bank of Nigeria (CBN) or a Pension Fund Custodian (PFC); adequate funding of the RBBRFA; consistent remittance of both employer and employee pension contributions; deployment of robust ICT to facilitate implementation efforts and institution of Group Life Insurance for employees.”

    She enjoined the states to comply fully with the scheme stating that the Commission would continue to collaborate with them to achieve full implementation.

    Speaking on safeguards of the CPS, she said it entails meticulous investment limits and risk rating, segregation of pension funds from assets of operators, daily, monitoring of investment of pension funds, guarantee from the parent company of PFCs and mandatory statutory reserve requirements for PFAs.

     

  • RSA not savings account, says PENCOM

    RSA not savings account, says PENCOM

    Retirement Savings’ Accounts (RSAs) cannot be designated as bank accounts, the National Pension Commission (PENCOM), has said.

    PENCOM made the clarification in reaction to claims by the Rivers State Council of the Trade Union Congress of Nigeria (TUC) which had threatened to embark on industrial action should the Commission implement the yet to be released “Guidelines on Unilateral Withdrawals from Voluntary Contribution from Retirement Savings Accounts (RSAs) by Contributors.”

    In a statement signed by its Head of Communications, PENCOM, said “there are indications that some Contributors may be confusing RSAs to be the same as Bank Accounts.  RSAs are not the same as Bank Accounts, so PenCom needs to discourage this practice.”

    He said that Voluntary Contributions into RSAs, “are meant to boost Contributors’ final pension and not a savings account that could be drawn at will.”

    The Guidelines, Onuora added, “will boost Government’s Fight Against Financial Terrorism and Money Laundering, and nip in the bud the dangers that could arise should Contributors decide to use RSAs to launder dirty money.”

    Onuora said the Guidelines remain a Draft, but stated that  “the Commission will expose it to stakeholders for their input in due course.”

    He urged the TUC,  Rivers State Council to harmonise its position on the issue and make useful input into the Guidelines, saying since the TUC is represented on the Board of PenCom, the workers could use this channel to address their grievances.

    The Rivers State Council of the Trade Union Congress had noted that the guidelines still in the making, provided that: “any person making Voluntary Contributions to his/her RSA in addition to the statutory contributions made by him and his employer, may withdraw up to  20% of the balance standing in the Voluntary Contributions portion of the RSA, not more than once in every four years.”

     

     

     

     

  • Why pension transfer window remains shut, by PenCom

    Why pension transfer window remains shut, by PenCom

    The National Pension Commission (PenCom) has identified the penchant by Retirement Savings Account (RSA) holders for registering more than once through their Pension Fund Administrators (PFAs) on the Commission’s database as the major challenge hindering the opening of the transfer of pension account from one  PFA to another.

    This was made known in a report by PenCom and obtained by The Nation.

    Section 13 of the Pension Reform Act, 2014 provides that, “Subject to the Guidelines issued by the Commission, a holder of a RSA maintained under this Act may not more than once a year, transfer his pension account from one PFA to another.”

    PenCom stated that for effective take off of the transfer window, the Commission is putting in place infrastructure and modalities that would enable the cleaning up of  existing registration database to eliminate multiple registration thereby facilitating the opening of the transfer window.

    The report reads in part: “In line with the provisions of the Act, the Commission has already released the regulations for the transfer of RSA to pension operators and also displayed same on its website.

    “A major challenge hindering the opening of the transfer window is the issue of RSA holders registering more than once through their PFAs on the Commission’s database.

    “For effective take off of the transfer window, the Commission is putting in place infrastructure and modalities that would enable the cleaning up of the existing registration database to eliminate multiple registrations thereby facilitating the opening of the transfer window.”

    The Commission however enjoined all stakeholders to exercise patience as the window would be opened as soon as possible.

  • PENCOM: Retired police officers petition FG

    PENCOM: Retired police officers petition FG

    The Association of Retired Police Officers in Kogi State has appealed to the Federal Government and police authorities to discontinue them from the contributory pension scheme, saying it is retrogressive.

    Mr. Alex Yusuf, Kogi chairman of the association made known their position yesterday at a press conference in Lokoja.

    He said that rather than improving the status of the pensioners the scheme had further impoverished them.

    He said that the decision to opt out of the contributory pension scheme of the National Pension Commission (PENCOM) was reached at the August 28 meeting of the association and reinforced in subsequent ones.

    He stated: “It is highly pathetic to note that after 35 years of meritorious service to fatherland, the officers who retired under the scheme who also co-paid their own retirement benefits are all
    languishing in abject poverty.

    “Before this category of retirees who are now chained to PENCOM, the Nigeria Police retirees were normally paid by the Federal Government in line with section 173(2)(3) and (4) of the 1999 Constitution, as amended.”

    According to him, the periodic salary and pension reviews of federal public officers ought to benefit all, including serving and retired police officers.

    He expressed regret that PENCOM retirees who started disengaging from July 1, 2007 were being denied.

    He said, “It seems that we are unjustly and of course totally cut off from such benefits that are supposed to be accruing to us. It is as if transferring to the PFA vendors and their agents via PENCOM was meant
    to sever us on punishment ground from the main body of the Nigeria Police Force.

    “A situation where an officer who while serving earned between N130,000 and N140,000 end up receiving between N20,000 and N30,000 as monthly pension negate the provisions of the constitution.

    “For added example, an officer who retired in 2011 on a contributory scheme received a little above N5 million as lump sum and was only given little above N1 million from the so-called lump as gratuity and
    monthly pension of between N20, 000 to N30, 000”.

    He said that while pension to retired officers was for life, pre-PENCOM retirees had theirs tied to 15 years.

    He appealed to the federal government to pay the 53.37 per cent pension increase which took effect from 1st June 2010, as well as the
    pension increase of 15 and 33 per cent of 2007and 2014 respectively.

    He urged the government to revert to the old pension system and bring police retirees back to the main body of Nigeria Police, for
    uniformity.

     

  • There is no contract staff in pension law, says PenCom

    The Nigerian pension law does not recognise anyone as a contract appointee, Director-General, National Pension Commission (PenCom), Mrs Chinelo Anohu-Amazu, has said. The Pension Reform Act (PRA) promulgated in 2004 was repealed and replaced by PRA 2014.

    Anohu-Amazu, who was  represented by Mrs. Opeyemi Abodunrin of the Public Sector Department of PenCom, made this known at a forum in Lagos. According to her, anyone working on contract or full employment, is entitled to be part of the Contributory Pension Scheme (CPS).

    She added that it is an obligation for an employee to open a retirement savings account and have contributions deducted from his or her salary and the employer to make same contributions.

    She stressed that the  new pension scheme does not recognise anyone as a contract appointee.

    Meanwhile, Lagos State and its Ministries, Parastatals and Agencies (MDAs) have been called upon to look for practicable ways of incorporating its contract or temporary staff into the scheme.

    The call was made at a forum organised by the state Pension Board (LASPEB) in Lagos. Participants at the event, who were drawn from the government, pension and insurance industries, expressed misgivings over the neglect of several casual workers by their employers.

    LASPEB Director-General, Folashade Onanuga, said the state has called on Heads of MDAs to discuss the way forward on contract staff within the state workforce.

    According to her, the state Pension Law states that the Scheme is applicable to pensionable employment. She said this means that contract staff are not covered and there is need to find how they can be absorbed into the scheme.

    She said: “The state law says it covers only those in pensionable employment, which is permanent staff. In Lagos State today, if you are employed and given a letter of employment, which states that your employment is contract for a temporary period of two or three years, the central processing unit where salaries are paid will pay your salary, but automatic pension contribution deduction will not apply to you.”

    A participant from one of the parastatals in the state, Mr. Sarumi noted that it is abnormal for an employee to have been engaged for numbers of years and allowed to go without pension.

    He said, though the Pension Reform Act 2014 encourages voluntary contributions, employers should ensure that casual employees, who have been engaged for long period, are covered in the pension scheme.

    Section 1 subsection 1 of the PRA 2014 states that the objective of the CPS is to ensure that every person, who worked in either the Public Service of the Federation, Federal Capital Territory, States and Local Governments or the private sector, receives his retirement benefits as and when due. It is also to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.

    Section 2 subsection (1) states that the provisions of the bill shall apply to any employment in the public service of the Federation, the public service of the Federal Capital Territory, the public service of the states, the public service of the Local Government and the private sector.

    Subsection (2) further states that in the case of the private sector, the scheme shall apply to employees, who are in the employment of an organisation in which there are 15 or more employees.

    Subsection (3) adds that notwithstanding the provisions of subsection (2), employees of organisations with less than three employees as well as self-employed persons, shall be entitled to participate under the scheme in accordance with guidelines issued by the commission.

    Although the PRA 2014 did not address the issue of casual employees, Section 2 of the act expanded the coverage of the CPS in the private sector organisations with three (3) employees and above, in line with the drive towards informal sector participation.