The Nation Newspaper

Tag: PenCom

  • NAICOM, PenCom collaborate on annuity, group life policy

    NAICOM, PenCom collaborate on annuity, group life policy

    The National Insurance Commission (NAICOM) and the National Pension Commission (PenCom) are working with other relevant stakeholders in the industry to implement the provision of the annuity and group life insurance policy in the contributory pension scheme.

    The regulators, last week held a workshop in Lagos, tagged: “Towards effective annuity and group life insurance regulation in Nigeria.”

    PenCom’s Acting Director-General, Mrs Chinelo Anohu-Amazu, said the strategy is meant to carry relevant parties along in resolving pertinent issues and to address any regulatory challenges militating against the successful implementation of the scheme.

    She said the Pension Reform Act allows a retiree to utilise the balance standing to the credit of his Retirement Savings Account (RSA) for either programmed withdrawal through the Pension Fund Administrator (PFA), or annuity for life purchased from a life insurance company.

    “Section 9 sub-section 3 of the PRA 2004 requires employers to maintain a life insurance policy for its employers for at least three times their annual total emoluments.

    “It is the mandate of NAICOM to regulate the annuity and life insurance markets. It is the responsibility of PenCom to ensure that the modalities for the administration of retirement benefits through life annuity as well as terminal benefits involving group life insurance policy are strictly followed to guarantee payments as and when due,” she said.

    The helmsman said since the take-off of the payment of retirement benefits to retirees who opted for annuity, no enlightenment aimed at creating awareness of annuity was carried out.

    Speaking on different procedures guarding the operations of the annuity, which he described as a programmed payment for life, the Assistant Director, Inspectorate, NAICOM, Sam C. Onyeka, said there are many provisions, which operators must obey for the benefits to be realised.

     

     

     

     

  • PenCom, PenOp set to tackle unclaimed retirement benefits

    PenCom, PenOp set to tackle unclaimed retirement benefits

    THE National Pension Commission (PenCom) and the Pension Fund Operators (PenOp) are to address the problems of unclaimed retirement benefits of retirees.

    PenOp’s President, Dave Udeanu, said some retirees have refused to collect their benefits from their Pension Fund Administrators (PFAs), adding that the development has made operators to intensify efforts at locating them and their families without success.

    He said operators would continue to educate the public, adding that the challenge cannot be tackled overnight.

    Worried by this development, PenCom has directed PFAs to advertise the names of the affected retireees in the national dailies. Dauda Ahmed of Corporate Strategy Unit, PenCom, who make this known, said the PFAs have also been directed to visit the last place of employment or address of the retirees to obtain any available contact information or those of their next-of kin in an effort to trace them and ensure that outstanding benefits are processed for payment.

    He said: “In effect, we wish to confirm that there are no “unclaimed pensions” with PFAs in the real sense of it, but possible issues of temporary delay in processing the withdrawal of pensions/terminal benefits due mainly to loss of contact.

    “The balance in the Retirement Savings Account (RSA) of a retiree comprises the proceeds of his retirement bond, his contributions from July, 2004 to the month of retirement and the investment income. At the point of retirement, the retiree is expected to submit necessary documents to, and discuss with the PFA on his preferred mode of withdrawal of his pensions. The retiree has the option of either Programmed Withdrawal (PW) which provides pension over the expected lifespan through the PFA or purchase of annuity from an Insurance Company which ensures payment of pension for life.

    According to him, these payments can only be made after the Commission had granted approval of the agreement entered into by the retiree with his Pension Fund Administrator (PFA) regarding the mode of withdrawal of his benefit.

    “Nevertheless, there could be delays by retirees or next of kin in the case of death benefits in accessing retirement or terminal benefits, but not “unclaimed pensions,” he said, adding that such delays can be attributed mainly to the inability of the PFA to contact the retiree who may have retired to his village without leaving an active contact address with the PFA.

    He urged the public to always liaise with pension operators to sort out issues, adding that the new pension scheme is poised to provide comfortable life style for retirees.

    Meanwhile, operators in the pension industry have said they would leverage on the integration of businesses in the informal sector to increase the number of contributors from 5.2 million currently to about 20 million by 2017.

    Udeanu, who disclosed this at a media parley in Lagos, said several additional incentives are being proposed to make the pension scheme more beneficial to persons working in the informal sector, who accounts for over 60 per cent of the working population in the country.

    He noted that the PenCom has released an exposure draft of the framework for the participation of persons operating in the informal sector, stressing that the draft is currently being finalised.

    He said the framework once released would ensure the participation of persons working in the informal sector and effectively increase the coverage of the scheme.

    Udeanu said PenCom will also before the end of the first quarter of this year, incorporate a multi-fund structure for Retirement Saving Accounts (RSA) funds, into the amended investment guidelines.

    He said: “The decision to introduce the multi-fund structure in the first quarter 2013, is to allow enough time for public education and sensitisation by the commission and also allow operators enough time to be ready to implement the structure.

    “The multi-fund would be primarily differentiated by their overall exposure to variable income instruments and a contributor’s choice of funds may be limited based on the age of the contributor. Also the multi-fund structure would likely also allow for the introduction of a non – interest or ethical fund.”

    Managing Director ARM Pension Managers Limited, Sadiq Mohammed, on pension contributory recovery agents, said the agents have visited about 8,584 firms out of 15,760 identified as non-compliant by not remitting their workers’ contributory retirement funds to the appropriate quarters, adding that over N2.5 billion is expected to be recovered from the identified defaulters.

    He said demand notices and accounts details of pension custodians for remitting deducted pensions have been sent to the firms visited.

  • PenCom unveils guidelines for state pension bonds

    THE National Pension Commission (PenCom) has introduced new requirements for states wishing to access pension funds for investing in state bonds.

    According to the Commission, such a state must first enact a law to establish the Contributory Pension Scheme, which must give its contributions the same priority as salaries.

    The law should also address every inconsistency observed by the National Pension Commission in its review.

    In a circular signed by the General Manager, Public Sector Pensions, Mrs G. E. Usoro, it said such a state must establish a state pension board and a local government pension bureau to coordinate the implementation of the contributory pension scheme and other related matters in the state.

    Besides, the state should open retirement savings accounts with PFAs for employees that in the Pension Scheme in the state, and ”fully remit both employer and employee pension contributions into the employees’RSAs for a minimum of six consecutive months from the date of commencement of the scheme in the state’’.

    The Commission’s new position also indicated that such a state must “secure a group life insurance cover that guarantees a minimum of 300 per cent of the yearly total emolument of the employees covered by the Contributory Pension Scheme.”

    PENCOM’s requirement said the insurance companies engaged for this purpose must be eligible life insurance firms, licensed by the National Insurance Commission (NAICOM) and duly certified by the National Pension Commission as being compliant with the provisions of the Pension Reform Act 2004.

    Other requirements, according to the circular, are that states wishing to access the pension funds: “Must have consistently funded the Retirement Benefits Bond Redemption Fund Account, with the Central Bank of Nigeria, or any PFA from the date of commencement of remittance of pension contributions by the state.

    “Must execute an Irrevocable Standing Payment Order (ISPO), to mandate the Accountant-General of the Federation (AGF) to deduct at source and remit monthly pension contributions from the state’s share of the Federation Account Allocation to the state, in line with the guidelines of the Commission.”

  • 40 broking firms, others get PenCom certificates

    Six insurance companies and 40 broking firms were among the 74 companies that received the National Pension Commission (PenCom) compliance certificates last year.

    In a statement, the commission said only 74 companies, which include, Creed Insurance Brokers Limited, Leadway Assurance Plc, and Lasaco Life Company met the requirement for the certificates by January 4, this year.

    The Pension Reform Act (PRA) 2004, made it compulsory for companies seeking government business to present certificates of compliance, which indicate that they are meeting the regulation on staff pension contributions.

    The PRA 2004 also mandates employers with minimum of five staff to subscribe to the new pension scheme.

    To ensure enforcement of the law, the commission said employers who fail to remit their pension contributions would pay two per cent surcharge, two weeks after deductions have been made by them.

    PenCom noted that employers are to remit employees contributions not later than seven working days from the day salary is paid, adding that if the default persists after three months, one per cent of the outstanding would be paid to the commission.

    The commission said it would sue defaulters if violation persists, adding that employers who refused to give access to information about their staff would pay a fine not more that N200,000 and that every false or misleading information would attract N100,000 fine daily for the duration of the the offence.

    It said any employer, who coerces employees to open RSA with Pension Fund Administrator (PFA) that is not their choice, would pay N1,000 after three months per employee for every month of violation.

    The commission is seeking leave of the attorney-general of the Federation to institute criminal proceedings against employers who refused to remit pension contributions

    PenCom called for the amendment of Section 11(7) of the PRA 2004, stressing that the provision ihas some limitations.

  • Fed Govt names new PenCom head

    NEW Head of the National Pension Commission (PenCom) has been named.

    She is Mrs. Chinelo Anohu-Amazu, PenCom’s Head of Corporate Communications Emeka Onuora said in a statement sent to the News Agency of Nigeria (NAN).

    Onuora said Mrs. Anohu-Amazu was selected as the most senior official of the commission.

    He said Anohu-Amazu was directed to preside over PenCom by the Secretary of the Government of the Federation.

    “The appointment of Mrs. Anohu-Amazu was as a result of her being the most senior officer in the commission,“ the statement said.

    “Anohu-Amazu is one of the key players in the pension reform programme and one of the experts that “midwifed” the Contributory Pension Scheme in Nigeria.

    “She served in the Fola Adeola Pension Reform Committee set up by former President, Chief Olusegun Obasanjo, and which helped in the enactment of the Pension Reform Act 2004,“ the statement added.

    The News Agency of Nigeria (NAN) reports that PenCom’s Director-General, Alhaji Muhammad Ahmad, had on December 16 stepped down from the office.

    This was due to the expiration of the tenure of the chairman and executive members of the PenCom Board.

     

  • Late remittance of deductions to attract fine, warns PenCom

    The National Pension Commission (PenCom) has warned employers to submit deductions in respect of pensions’ contributions within two weeks or risk two per cent fine.

    In a statement, it said: ‘’Employers are to remit employees’ contributions not later than seven working days from the day salary is paid.”

    It noted that if default persists after three months, one per cent of the outstanding pension would be paid to the commission.

    PenCom warned that it would sue defaulters if violation persists. It added that employers who refuse to give access to information about their staff would pay a fine of not less than N200,000 and that every false or misleading information would attract N100,000 fine daily.

    It said any employer who forces its employees to open an account with a Pension Fund Administrator (PFA), would pay N1,000 after three months per employee for every month of violation.

    Besides, it was gathered that the commission is seeking powers to enable it to sue employers for refusing to remit pension contributions.

    PenCom called for the amendment of Section 11(7) of the Pension Reform Act (PRA) 2004, saying the provision is faulty.

    It said: “Power to Institute Criminal Proceedings against Employers for Persistent refusal to Remit Pension Contributions: Section 11(7) should be amended to empower the Commission to institute criminal proceedings against employers who persistently fail to deduct and/or remit pension contributions within the stipulated time; review the penalties and sanctions, arguing that the sanctions provided under Section 85 are no longer sufficient deterrents against infractions of the PRA 2004.

    It, therefore, suggested that Section 85 should be amended to provide for stiffer penalties.

    Pencom’sDirector-General, Mohammad Ahmad, said 172 debt recovery agents had been employed to collect unpaid contributions, adding that they have resumed.

    He explained that the agents, who are lawyers and accountants, would ensure that employers comply with laws on remittance of their workers’ contributions.

    He noted that 50 per cent of the penalty from outstanding contributions recovered through the agents would be given to employees with RSA, while the balance would be used to defray the cost of recovery.

    He added that PFAs would not be allowed to charge administration fee on retirement savings’accounts that benefited from the recovery of the arrears.

    He said each agent’s performance would be monitored based on performance.

    He said: “The Commission would hold quarterly meetings with the recovery agents and PFAs to discuss remuneration of recovery agents which would be performance based. The remuneration would be met from the interest penalty charged on the outstanding contributions recovered through the efforts of the agents and administration fees charged by PFAs.

    “In that regard, 50 per cent of the interest penalty would be used to defray the cost of recovery while the balance would be for the benefit of the RSA holder. In addition, PFAs would not be allowed to charge administration fee on RSAs that benefited from the recovery in the arrears or in retrospect.

    “Recovery agents would be required to submit monthly progress report with respect to recoveries from employers assigned to them. The reports would be reviewed to determine if the performance of the agent is satisfactory or otherwise. Challenges encountered and ways forward would also be reviewed. The compliance and enforcement department would be responsible for the implementation of the framework in conjunction with other relevant departments in the commission.

    “The Commission would provide the secretariat and basic resources, such as telephone and Internet access for use of the recovery agents. The secretariat would be located in the Commission’s office. The framework is subject to a periodic review to ensure speedy recovery of un-remitted pension contributions by employers.”

  • PENCOM, Edun end dispute

    PENCOM, Edun end dispute

    Parties in the suit instituted against the National Pension Commission (PENCOM) and a director of Trustfund Pensions Plc, Olawale Edun, have resolved their differences.

    The dispute ended with the parties agreeing to a consent judgment whose terms were endorsed by Justice Mohammed Liman of the Federal High Court (formerly of Lagos division).

    PENCOM in May 2007 issued a statement claiming to have summarily sacked the directors of Trustfund Pensions Plc including Edun; U.M. Abubakar; Sebastian Adigwe and J.D. Lawuyi for purportedly breaching the Pension Reform Act.

    Aggrieved by the development, Edun instituted a suit through his lawyers, Tunde Odanye & Co.

    He contended, among others, that the reasons for his removal were neither true nor correct.

    Edun argued that he was denied fair hearing as he was not given an opportunity to respond to the false allegations levelled against him before the decision was taken by the administrative panel set up by PENCOM.

    Hearing began before the Chief Judge of the Federal High Court, Justice Dan Abutu, where PENCOM and its Director-General were represented by Tony Idigbe (SAN).

    Upon Justice Abutu’s retirement, the case was trans ferred to Justice Liman in Lagos.

    At a stage during the proceedings, the parties agreed to end the dispute by agreeing to a consent judgment.

    Terms of the judgment entered on July 5 addressed the issue of fair hearing and the purported summary removal.

    It ended with the proviso that there were no admission of liability by either party with regard to the allegations, claims and counter-claims in the suit; the letter in dispute and its contents and that each party was to be responsible for his costs.

    Edun hailed the judgment and said justice has prevailed.

     

     

  • Nigeria needs N32t for infrastructure, housing

    The Federal Government requires N32 trillion to provide infrastructure and housing, the National Pension Commission (PenCom) and the Nigerian Economic Summit Group (NESG) have said.

    They made this known in a statement issued at the end of the Stakeholders’ Forum on Nigeria’s Pension System in Abuja.

    The highlights from the presentations and discussions at the forum indicated that Nigeria’s pension sector has 5.32 million registered contributors.

    PenCom said though there is N2.93 trillion in pension assets, with 5.3 million registered pension contributors, about 64 per cent of whom are below 40 years, only about 30 per cent of quoted stocks are active on the Nigerian Stock Exchange (NSE).

    The Commission also said about that same percentage meets the minimum criteria for pension funds investment and this is about 80 per cent of the trading in the market.

    It also said countries with large pool of funds have better developed economies, with developing countries holding only three per cent of long-term funds (LTFs) globally while developed countries hold 34 per cent and emerging economies hold the majority 63 per cent.

    It hinted that global LTFs range from a size of $300 billion in foreign direct investments to $3 trillion in private equity funds with Nigeria having 15 per cent sub-optimal growth gap, going by the difference between nominal output growth of 22 per cent and real output growth seven per cent.

  • Retirees collect N1.77b monthly as pension – PENCOM

    Retirees collect N1.77b monthly as pension – PENCOM

    The Director-General of National Pension Commission, Mr. Muhammed Ahmad, said that retirees under the Contributory Pension Scheme collect about N1.77 billion monthly as pension.

    Ahmad stated this at a workshop with the theme entitled: “Effective Administration of Benefits under the Pension Reform Acts 2004” organised by the Commission for journalists in Abuja.

    He said that the retirees, numbering 54, 558 from both the public and private sectors, had also collected over N151.52 billion as lump sum on retirement.

    “There are currently 54,558 retirees from the public and private sectors under the Contributory Pension Scheme that have collected over N151.52 billion as lump sum.

    “They are also collecting about N1.77 billion as monthly pension while assets worth N2.94 trillion have been accumulated as at the end of September 2012,” the News Agency of Nigeria quoted the PENCOM boss as saying during the workshop.

    According to Ahmad, about 5.28 million Nigerians have been registered on the scheme as at September 2012.

    The director general said the recapitalisation of the Pension Fund Administrators (PFAs) from N150 million to N1 billion was successfully accomplished.

    He said the commission had taken legal action against employers that have not complied with the Act.

    Ahmad said that the informal sector ‘received a major boost with the commission’s appointment of about 124 Recovery Agents.

     

  • PenCom seeks tax exemption for pension returns

    PenCom seeks tax exemption for pension returns

    The National Pension Commission (PenCom) is seeking tax exemption and strict enforcement of the Pension Reforms Act 2004 to ensure returns on investment of pension funds.

    This, its Director – General, Mohammad Ahmad, said would enhance retirement benefits.

    In a statement, he said though Sections 7 and 10 of the Pension Reform Act (PRA) 2004 provided for tax exemption at the point of accumulation and payment of retirement benefits, it is silent on taxation of income from investment of pension funds.

    “To ensure real returns on investment of pension funds and ultimately enhance the retiree’s retirement benefits, the income earned on investment of pension funds should also be exempted from taxation,” he said.

    “On exemption of Pension Fund from Tax, Ahmed said even though Sections seven and 10 provides for tax exemption at the point of accumulation and payment of retirement benefits, it is silent on taxation of income from investment of pension funds.

    “In order to ensure real returns on investment of pension funds and ultimately enhance the retiree’s retirement benefits, the income earned on investment of pension funds should also be exempted from taxation,” he said.

    The PenCom boss called for the amendment of Section sevens of the Act to include tax exemption on income from investment of pension funds.”

    Chief Executive Officer, IBTC Pension Managers, Dr Demola Sogunle, also said tax exemption should be used by the government to encourage employers to embrace the pension scheme.

    Sogunle said one of the ways the government could assist to ensure the success of the scheme is to engender strict enforcement of the Pension Reform Act 2004.

    He noted that government needs to enforce strict sanctions against defaulting employers, adding that the introduction of the new scheme has induced nation-wide mass saving culture, which allows Pension Fund Administrators (PFAs) accumulate assets that can be invested in financial markets.

     

    Sogunle noted that one of the major challenges against the success of the scheme in the private sector is the fact that many employees are yet to register with a PFA, while some employers fail to remit or are defaulting in remitting contributions into their employees Retirement Savings Accounts (RSAs).

    “The issue of defaulting poses a major challenge to the success of the contributions pension scheme, since it influences the adequacy of the benefit payments to participants. A lot of enlightenment is required to ensure that employers and employees understand the benefits of keying into the contributory pension scheme, especially as it is mandatory by law,” he said.