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Tag: PENOP

  • PenOp: Ghost pensioners impossible under new pension system

    PenOp: Ghost pensioners impossible under new pension system

    The procedure for registration of a Retirement Savings Account (RSA) under the Contributory Pension Scheme has made it difficult for ghost workers to receive pensions, Chairman, Pension Fund Operators Association of Nigeria (PenOp), Lounge Eguarekhide, has said.

    He made this known at a briefing in Lagos on allegations that Pension Fund Administrators (PFAs) connived with some civil servants and bank officials to generate fake pin numbers for ghost workers culminating into ghost pensioners.

    He described reports that the Director-General of PenCom was summoned, and PFAs are being investigated as salacious gossip.

    He stated that it is impossible for anyone to generate fake pin number because ghosts cannot receive pensions under the new pension system, adding there is a procedure for registration under the scheme, which include in-built checks and balances.

    He noted that there is a central data bank with PenCom that stores the pin numbers and issues them. He said: “There are some facts on the government side which they have confronted the National Pension Commission (PenCom) with. I also heard that there was a bank being investigated. But I cannot respond finitely but I can explain the process which will show you that it is impossible for fake pins to come alive.

    “There is no fake pin and there are no genuine pins. The way it works is that you have an RSA account, you sign a form when you wanted to set up your RSA, send it to your PFA who sends to PenCom. A pin is generated and you thumbprint. You give the pin to your employer and your pension contributions start. That is the process of getting a pin.

    “There is a central data bank in PenCom that stores and issues the pins. What they may think are fake pins are that, in some parts of the country at the beginning of the scheme, there were issues with registration and some people registered a number of people by just filling the forms and send pins to them. These people went to register in other places leading to double registration. So there is that possibility.

    “But whichever way you register yourself on CPS, when you want to exit, you have to present yourself as a living human being and not a ghost. So there are inbuilt checks and balances. There is also the possibility of people who belong to the defined benefit scheme which I think is the case. To say PenCom Director-General was summoned and PFAs are being investigated is a salacious gossip but we have to explain to you the procedure for registration. Ghosts cannot collect pensions because there are inbuilt checks and balances.”

  • PenOp, NGOs provide free healthcare to elderly people

    The Pension Fund Operators Association of Nigeria (PenOp) in partnership with selected Non- Government Organisations (NGOs) have provided free treatment for various levels of ailments for about 1000 elderly people in Lagos.

    The  elderly people were treated of various ailments such as prostate cancer, hernia, breast lump, diabetics, and general surgeries conducted by surgeons, gynecologists, oncologists, nurses and other medical experts.

    Executive Secretary of PenOp, Susan Oranye who spoke during the week-long exercise, code named Project Gray 2.0 said the initiative is in line with its Corporate Social Responsibility (CSR) project in the country.

    She said operators understand that having a pension to fall back on in retirement and good health is the main focus of many elderly men and women.

    She added that it is this commitment to the wellbeing of old people that led to PenOp’s collaboration with the Orange Health Initiative in ensuring that the old people have unhindered access to medical checkups and treatments for this week.

    She said: “The Project Gray 2.0 is an initiative that celebrates the World’s Elders’ Day. Now, it is important that as a country and as a people we take care of our elderly, make sure that in retirement they can, at least, maintain a decent standard of living. This is the ethos that guide the pension system in the country.

    “PenOp is exceedingly excited about this programme because this project marks the kickoff of first Geriatric Hospital in Nigeria and this is something we are passionate about.”

    Chairman of Legus Foundation and Founder of Veteran Hospital, Dr Kola Adeyina who in Lagos metropolis where the elders are currently receiving treatment said the project slated to last for one week is conducted by specialists from different medical callings.

    The medical expert who said he has been treating Nigerian children free since 1977 said the project would cost the organisers over N20 million.

    Coordinator of Orange Health Initiative, Dr. Kunle Megbuwawon, who believes that getting to the golden age is a privilege that eludes many, said that the goal of the programme is to take care of 1000 elderly people with about 50 of them undergoing surgeries, while at least 15 of them are expected to undergo cataract operation and can go home smiling at the end of the exercise.

    He said Project Gray was borne out of the passion for elderly people in the society and aims at turning the Legus Specialist Hospital into the first Geriatric Hospital in the country.

    Mrs Bimbo Olateju, an old retiree said she is very happy with the free drugs and test she received.

    Another elderly man who simply identified himself as Mr Kunle said: “I am very grateful to them because as an old man, I don’t have the money to go to the hospital or get drugs for myself but with this free drugs and test I am getting, I am truly grateful”.

  • N3.25tr pension funds invested in govt securities, says PenOp

    N3.25tr pension funds invested in govt securities, says PenOp

    About N3.25 trillion out of the almost N5trillion of the Pension Funds so far collected have been invested in Federal Government securities, the managers of the fund, have said.

    The Chairman, Pension Fund Operators Association of Nigeria (PenOp), Alhaji Musbahu Yola, said this yesterday when he addressed journalists at the end of the consultative forum between the National Pension Commission (PenCom) and Pension Fund Administrators (PFAs) in Abuja.

    He said the invested amount is equivalent of 65 per cent of the almost N5 trillion pension assets currently warehoused by pension operators, adding that another 12 per cent has been invested in equities, while 15 per cent is invested in the money market.

    Yola maintained that not withstanding the recent removal of Nigeria from the JP Morgan Index, the country’s Pension Fund Operators will continue to invest in FGN Bonds and Treasury Bills, pointing out that FGN Bonds are not only profitable, they are safe to invest in.

    He aid the removal of Nigeria from JP Morgan Index  would favour PFAs because exiting foreign investors will have to sell their assets at lower prices and it doesn’t mean that the FGN Bonds have become junk.”

    He said PenOp members “will continue to invest in FGN Bonds and Treasury Bills,” wondering  where else would we put the money, Treasury Bills and Bonds are safer assets” he said.

    Yola also revealed that it has been agreed between the PenCom and PenOp members, that 20 million Nigerians will be captured into the pension net by 2024 from the current 6.6 million pension contributors, saying “this is the best we can do under the circumstances and it points to the fact that majority of Nigerians are employed outside the formal sector.

    “State governments have also not complied. The point really is that  most Nigerian businesses are informal or are SMEs that haven’t really kicked in for one reason or the other if our economy develops and becomes more Industrialised with more formal corporations, a lot of people will be captured in the pension net but many Nigerian just do small jobs that are not incorporated.

    You can’t get them in so easily, we know we have a lot more to do, but we shouldn’t be discouraged by the fact that it is 6.7 million out of 170 million. Our objective is to go 20 million by 2024, that is where the informal sectors being captured in the guidelines comes in” he said.

    Regarding unremitted employees’ pension after deductions have been made, members of PenOp urged employees to blow the whistle on the employers. They said “employees are responsible for their pension. If employers are not remitting, employees should go to their PFAs and report, you must be in charge of your pension. The PFAs do not have the power to enforce complaints. PENCom has the power of enforcement and they have engaged recovery agents employees must also rise up the law is backing them they have to find the means of making their employers make those remittances on their behalf either as a union, they must come together and pressurize their employers particularly where they have deducted from the salaries and have not remitted.”

    Yola and his team PenOp associates wondered that “if people are afraid of speaking up for their right who will do it for them? Now anybody who wants to do a job with the federal government must produce their certificate of compliance and some private organizations have included it in their manuals too so that they don’t go foul of the law especially those that provide them with contract staff. To prevent victimization PenCom has been mandated not to reveal the identity of whistle blowers.”

  • PenOp seeks investment channel for $25b pension fund

    A safe and workable system must be designed to channel the $25 billion pension funds, (approximately N4.925 trillion) accumulated by the pension industry for real economic development, Chairman, Pension Fund Operators Association of Nigeria (PenOp) Misbahu Yola has said.

    He made this known at the 2nd forum of PenOp, organised in Nigeria by Africonomie for African Pensions.

    Aside from investment of the pension funds, Yola highlighted regulation, enlightenment of the general public and collaboration of major stakeholders as key areas that need to be worked on to facilitate and build a strong and sustainable pension system that works for the Nigerian environment.

    He disclosed that as at May 31, 2015, Nigeria’s Contributory Pension Scheme (CPS) had approximately 6.6 million contributors and assets in excess of USD25 billion.

    He said that as impressive as this may sound, they have only just started.

    According to him, much more remains to be done as they have covered less than one tenth of the working population.

    He added that the assets are less than five per cent of the nation’s GDP and the effect on economic development is still at embryonic stage.

    He said: “To effect significant changes, it is imperative that the regulator, pension operators and other key stakeholders work together to build a strong and sustainable pension system that works for our environment.

    “Nigeria has drawn a lot of international attention in recent years due to the success of its CPS. The scheme has been in existence for only 10 years and is therefore relatively young when compared to some of its counterparts in Africa.

    “The common vision shared by all the players in the Nigerian Pensions industry is to see this contributory pension system grow to its full potential. This is by no means an easy task especially when we consider the size of our economy, our population and a lack of proper understanding and often mistrust at all things pensions. Nevertheless, a lot has been done since then by the National Pension Commission (PenCom) and pension operators to develop and improve the new pensions system.”

    Speaking on regulation, Yola said  the secret behind any solid structure is its foundation.

    “For the pension system in Nigeria, the foundation is the law and by extension the Regulator that is custodian of this law, PenCom. In order for the system to succeed and be sustainable, the regulator must remain focused and continue to be innovative in its guidelines, regulations, codes and various other rules of operations.

    “While being consultative, it must continue to be firm in monitoring and supervising the management and administration of the funds. It must also enforce compliance by employers in accordance with the law and sanction those who contravene any section of the Act. Fortunately the PRA 2014 has conferred more powers on PenCom in this regard. In addition, PenCom must continue to engage regulators in other industries that have a bearing on pension funds management.

    “Similarly, there is a strong need to re-orientate the general public on the need for pensions and assure them of the effectiveness of the CPS. The states and local governments and indeed the informal sector should also be encouraged to join the scheme as required by law. The mistrust from the past experiences still lingers and this must be dealt with by assurances of the safety of the current CPS structure if we want to move forward in building a strong and sustainable pension system.”

    In the same vein, the PenOp chairman said collaboration of key stakeholders namely SEC, CBN, FIRS, FMDQ, NASD, Private Equity and Infrastructure Funds etc is extremely important in achieving sustainability.

    On investment of pension funds, he said that an enabling environment that facilitates the creation of quality investible products and alternative asset classes through which the pension assets can be invested safely but with relatively high returns for the contributors must be encouraged.

  • PenOp aids pension remittances with EPCCOS

    PenOp aids pension remittances with EPCCOS

    A pension industry platform named Electronic Pension Contribution Collection System (EPCCOS) that will drive seamless pension remittances of employees’ contribution by employers under the contributory Pension Scheme (CPS), has been developed by the Pension Fund Operators Association of Nigeria (PenOp).

    The EPCCOS platform is free for employers and will enable them comply with the scheme without difficulty. The platform is being tested with over 500 employers and will be formally launched for use by the public in January next year.

    The Managing Director, UBA Pension Fund Custodian and Chairman subcommittee on EPCCOS, Bayo Yusuf, made this known in Lagos at this year’s PENOP media partners retreat in Lagos. He said the pension operators are currently doing a pilot run on the platform with about 500 employers.

    He said the platform developer and host is the Nigerian Inter Bank Settlement System Plc (NIBSS), a company owned by the Central Bank of Nigeria (CBN).

    He said: “What we are doing with the employers now is for us to see whatever challenge an employer can encounter in the course of using the service. It is an industry application supported by the National Pension Commission (PenCom). The Commission has a regulatory oversight to ensure standards are maintained and necessary things are being done. The next phase is for them to give us a national database so that the validation will be done immediately.”

    Yusuf said the objective of the platform is to ensure seamless remittances, minimise reconciliation issues, timely crediting of employees’ Retirement Savings Account (RSA), and the elimination of employers’ burden of multiple schedule generation.

    NIBSS Head Business Process Outsourcing Department, Samuel Oluyemi, said: “Just like we had the problem of unremitted dividends in the capital market, the problem that EPCCOS came to solve is that of unremitted pensions.”

  • PenOp begins campaign on workers’ right to RSA

    PenOp begins campaign on workers’ right to RSA

    The Pension Fund Operators Association of Nigeria (PenOp), has kicked off a campaign programme to boost employers and employees awareness on the need to open Retirement Savings Account (RSA).

    The campaign, which commenced with a rally at the May Day celebration at Onikan Stadium, Lagos, was a follow up to seminars and interactive sessions held with employers and employees.

    The Secretary, PenOp, Susan Oranye, who made this known,  said the theme for the campaign, ‘Every worker deserves an RSA,’ was instructive and  urged workers to leverage on the Contributory Pension Scheme (CPS) to secure their future.

    She said the National Pension Commission (PenCom) and pension operators, are working hard to tackle the problem of non-remittance of monthly pensions by employers.

    She stressed that the Contributory Pension Scheme remains one of the best things to have happened in country in recent years, adding that the scheme has instilled blighter future for workers.

    She noted that the scheme was introduced to eradicate the ugly sights where workers queue, cry and beg for their pension, stressing that the new scheme is transparent, fully funded, safe and should be embraced by very worker.

    She said: “PenOp is here to honour and support Nigerian workers, which is what the workers’ day is all about. The underlying concern for all pension fund administrators is for the workers, to prepare them for when they would not be able to work again.

    “Workers are indeed working hard, but they should also understand that after work, they still have bills to pay and how to pay these bills should be planned now that they are in active service. We are calling on workers who are yet to embrace the contributory pension scheme to do so now.”

    She said the pension industry has done exceedingly well, given the level of awareness, adding that since the scheme started, about N24 .6 billion has been paid to over 84,000 retirees.

    “This is a new dispensation; it is not like the old scheme where people line up, cry and beg for their money. The new scheme is really working and focused on workers. It is transparent, fully funded and safe. Hence, every worker should embrace it, as it provides decent living for retirees,” she said.

    “We have been educating them on the need to understand that the funds are for their employees and that they should also consider the system as a corporate social responsibility which helps in boosting the morale of workers.

    “When employers provide secured future for their employees through pension, they will be happy to give their best, which will raise the bottom-line of the employer. This is why all employers of labour, both in public and private sector must support their staff to open an RSA with any PFA of their choice so they can benefit when they retire”. She said the industry has come up with names of defaulters and is working on their level of compliance.

    Head, Risk and Compliance, Stanbic IBTC Pension Managers, Idu Okwuosa, said the event provided an opportunity for PenOp to let workers know how important it is to have a retirement savings account.

    She added that as at February, the pension assets stood at about N4 trillion from about 5.9 million contributors from the 20 Pension Fund Administrators (PFAs) operating in Nigeria.

    She said: “The pension asset under the contributory scheme is projected to peak at about N4.3 trillion by end of December 2014 from projected 6.2 million contributors.The growth rate of industry contributions nationwide is about $2 billion annually which is over N300 billion apart from market returns.

    Under the contributory pension scheme, employers deduct 7.5 per cent of individual workers monthly salary and contribute at least the same amount which is credited into the workers’ Retirement Savings Account in any of the PFAs chosen by individual workers. The PFA manages the accumulated funds, which is under the custody of the PFC chosen by the PFA, she noted.

  • No official can steal N4tr pension fund, say PenCom, PeNop

    The N4trillion workers and retirees’ contribution under the Contributory Pension Scheme (CPS) cannot be stolen by any individual, or organisations owing to its structure, the Acting Director-General of the National Pension Ciomision, Mrs. Chinelo Anohu-Amazu, has said.

    This is coming on the heels of claims by the Chairman of Independent Corrupt Practices and Other Related Offences Commission (ICPC), Mr. Ekpo Nta that a junior staff member of the Commission was arrested with 50 bank accounts with others involved in fraud running into billions of naira.

    The discovery resulted in a public outcry from Nigerians who could not hide their disappointment following the development which painted all the assurances of safety of pension fund under the contributory pension scheme in bad light.

    Part of the setback for CPS is the negative impression of the residual scheme from the Defined Benefits of Non-Contributory Pension Scheme in the country, which is fraud prone. This has continued to pose serious challenge to the nine-year old contributory pension scheme in the country.

    PenCom Acting Director-General, Mrs. ChineloAnohu-Amazu told The Nation, that she was miffed by the report, noting that the Commission had been working hard to gain the confidence of Nigerians.

    She said the junior officer mentioned by the ICPC is not a PenCom staff member and the ICPC had recanted that the man is a civil servant.

    She said there are safeguards protecting the pension funds from misappropriation, with the functions of custody and administration of the funds clearly delineated in the Pension Reform Act, 2004.

    Mrs. Anohu-Amazu stressed that while the Pension Fund Custodians (PFCs) are in custody of the funds; the PFAs manage and administer the contributions, adding that the PFAs and PFCs are also mandated by the Commission to maintain high levels of transparency and accountability and to give contributors unfettered access to any information relating to their accumulated pension savings.

    She said: “PenCom has in place strict regimes, which include daily monitoring of the investment activities of PFAs and the institution of strict pay-out authorisation requirements. These ensure that PFAs are not reckless in their investment decisions, while ensuring that only the right beneficiaries would have access to the pension funds

    “Some other measures include the guarantee to the full sum and value of the pension fund and assets held by Pension Fund Custodians as mandated by the regulator as well as risk rating for instruments that pension funds could be invested in.

    “In addition to the engagement of a Compliance Officer (CO) who is saddled with ensuring compliance with the provisions of the law regarding pension matters as well as the internal rules and regulations of any operators, PenCom keeps track of the activities of pension operators. Every PFA is also required to maintain a Statutory Reserve Fund, into which shall be credited annually with 12.5 per cent of the net profit after tax, or as stipulated by PenCom to meet claims.”

    Mrs. Anohu-Amazu said the Commission also imposes legal and administrative sanctions for non-compliance with the rules and regulations as any operator found wanting would be sanctioned in line with the law, among other things.

    These checks and balances, she noted, were embedded in the law to give the contributors rest of mind and encourage workers not to be skeptical about the new contributory pension scheme. The pension reform has addressed problems of past pension schemes to a large extent, she stated.

    Also, Chairman, Pension Fund Operators Association of Nigeria (PenOp), Mr. MisbauYola, said it would take the collusion of PenCom, PFA and PFC officials to loot the fund.

    He assured the six million employees who are listed in the CPS of the safety of their contributions.

    He said the law establishing the CPS has an in-built mechanism that guarantees safety of the funds and its availability at the point of retirement of the worker, adding that the funds are protected and would be available to them at their point of retirement.

    Yola added that since the coming on board of the Scheme about eight years ago, it has not recorded any form of fund mismanagement, saying, “The system is watertight and no one can have access to the money except the contributor at the point of retirement,” he added.

  • Pension operators not running down life annuity, says chair

    Pension operators not running down life annuity, says chair

    Chairman of Pension Operators in Nigeria (PeNop), Mr. Dave Uduanu, has said it is the choice of would be retirees to opt for programme withdrawal or life annuity products.

    Before now, insurers had alleged that some Pension Fund Administrators (PFAs) in their desperation to continue to manage Retirement Savings Account (RSA) holders’ pension savings even in retirement run down life annuity products and their providers.

    Uduanu, who spoke with journalists said PenCom has done its bit in working with insurance companies and the regulator. He said that insurers and PFAs were invited to a seminar where the two products were extensively discussed.

    At the end of the day, it is the choice of would be retirees whether to go with programme withdrawal or annuity.

    He said: “It is not the job of PFAs to sell annuity. We do not sell annuity. We give our contributors the option to choose programme withdrawal or annuity. Therefore we cannot answer why insurers are not selling. It is just that people decide to choose programme withdrawal.

    “As we said at the workshop, because the scheme is just seven years, programme withdrawal may take the lead, and after a while annuity will catch up.

    “There are issues we also raised about annuity with the National Insurance Commission (NIACOM), which will address them.

    “It is not the fault of the PFAs that annuity is not taken. I know that there is high demand for annuity recently and it will soon pick up.”

  • Six states comply with Contributory Pension Scheme

    Six states comply with Contributory Pension Scheme

    Six states – Lagos, Ogun, Delta, Kaduna, Niger and Jigawa- have fully complied with the Contributory Pension Scheme (CPS).

    This means that they have maintained life insurance in favour of their employees for a minimum of three times their yearly total emolument as contained in section 9 (3) of the Pension Reform Act, 2004.

    While six other states have their own pension arrangements for their employees, 24 states are yet to have any pension arrangement for their workers.

    President of Pension Fund Operators Association of Nigeria (PENOP), Dave Uduanu, who made this known at a media parley in Lagos, said the National Pension Commission (PenCom) and the association are worried by this trend and have devised measures to enlighten the non-compliant states to key into the scheme.

    He, however, said operators were sensitive about the management of the fund.

    According to him, the scheme is young but growing, making its safety critical in meeting its key objectives, which is to ensure that workers (contributors) have access to their funds at retirement.

    Uduanu said this was why operators were wary of where to invest, despite pressures from all corners, that pension funds should be used to develop projects such as infrastructure.

    He said: “We have quite a lot of investment windows approved for us by our regulator, but still, we are buyers of securities, we are buyers of investment instruments and not a charity organisation that would repair roads and electricity.

    “If roads are to be built for tolls, or other liquid investments, where we are sure that retirees’ funds are safe we can be part of it.”

    Chief Executive officer, Stanbic IBTC Pension Managers Limited, Demola Sogunle, while speaking on regulation of the industry disabused the minds of many who continue to say that the industry is over regulated.

    He said: “We cannot be talking about over-regulation in a young industry that has to do with contributors’ emotions, an industry that is about retirees’ vulnerability.

    “It is important that the industry is properly established for safety of the funds.”

    He added that there would be guidelines from time to time, to define codes, ethics and conduct of the operators.

    Managing Director, Legacy Pension Managers Limited, Misbahu Yola, said the accounts of PFAs are International Financial Reporting Standard (IFRS) compliant in line with the deadline set by PenCom.

    He said: “On International Financial Reporting Standard (IFRS), the compliance deadline for all operators was December 31, 2012. A number of our results are already out, which are in compliance with the IFRS. We have all complied.”

    The Federal Government had informed operators in the economy that IFRS will be the new basis of financial reporting with effect from January last year.

    The adoption of IFRS would likely result in high quality, transparent and comparable financial statements based on internationally accepted modern accounting principles and concepts.

    IFRS are principles-based standards, interpretations and framework adopted by the International Accounting Standards Board (IASB). Its overall objective is to create a sound foundation for future accounting standards that are principles-based, internally consistent and internationally converged.