The Nation Newspaper

Tag: pension administration

  • So far, so good

    So far, so good

    A lot was done on pension administration last year, 20 years after the implementation of the Pension Reform Act (PRA) 2004, repealed by PRA 2014. OMOBOLA TOLU-KUSIMO writes that technological enhancement, service delivery and public satisfaction, among others, are areas of focus by stakeholders in the industry.

    The reform put pensions under the regulation and supervision of the National Pension Commission (PenCom) and established the Contributory Pension Scheme (CPS) to take care of pensions of workers who retire from July 2007.

    The reform consequently created the Pension Transitional Arrangement Directorate (PTAD) in August 2013 to take care of pensioners who retired before July 2007.

    PenCom

    Last year, PenCom continued its supervisory role on Pension Fund Administrators (PFAs), Pension Fund Custodians (PFAs) and Closed Pension Fund Administrators (CPFAs), ensuring that the ring-fencing of pension assets under CPS through the separation of custody and management functions guaranteed the safety of pension assets.

    Under the CPS, the assets are ring-fenced through the separation of custody and management; monitoring of fund investments; segregation of funds from the assets of pension operators; prohibition of applying pension funds as loans or as collateral for loans; strict licensing requirements; and effectiveness of the CPS safeguards have been critical to the growth and security of the funds.

    In July, President Bola Tinubu appointed a new Director-General for PenCom, Ms. Omolola Oloworaran, to succeed Mrs. Aisha Dahir-Umar.

    Subsequently, last December, Oloworaran said there were over 10.5 million contributors and pension assets in excess of N21.9 trillion as of October and, indeed, by November, it was N22trillion.

    She said technology has become the backbone of transformation across all sectors, and the industry is no exception.

    She said: “At PenCom, we have embraced this transformation wholeheartedly. Since assuming office, my team and I have been focused on strengthening compliance, enhancing service delivery, diversifying pension assets to optimize returns, improving benefits, and expanding coverage to include more Nigerians, especially those in the informal sector. The micro-pension initiative, in particular, is something we are very passionate about. It is our way of saying that no one should be left behind, no matter how small their earnings might be. Technology plays a vital role in driving this inclusion, from mobile enrollment to real-time account management to benefits administration. We intend to use technology to scale the micro-pension plan.

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    “This year, we achieved a major milestone with the launch of the e-Application Portal for Pension Clearance Certificates (PCC) in October. This initiative replaces the previous manual process, enabling companies to seamlessly apply for and receive PCCs online. Since its deployment, we have issued over 38,000 PCCs, significantly enhancing ease of doing business and ensuring compliance. Additionally, the Pension Industry Shared Service Initiative is in advanced stages of implementation. This initiative will digitise pension contributions and remittances, ensuring seamless processing of contributions and resolving discrepancies caused by incomplete remittance details.

    “To further enhance contributors’ experiences, we have introduced a revised programme withdrawal template, simplifying access to voluntary contributions and revising the threshold for en-bloc payments in line with the new minimum wage. These measures are designed to make retirement processes more efficient and user-centric. But beyond policies and systems, what really excites me is the potential to transform lives. Every time I meet a pensioner who is able to live comfortably because of the contributions they made during their working years, it reminds me of why this work is so important. And every time I hear from a young entrepreneur or artisan who has signed up for the micro-pension scheme, it strengthens my belief that we are moving in the right direction.’’

    PTAD

    The year started with uncertainty for pensioners under the Defined Benefits Scheme (DBS) and their regulator, the Pension Transitional Directorate Arrangement (PTAD), with the announcement of PTAD scrap in February, last year.     

    President Tinubu had ordered the full implementation of the Oronsaye Report that led to the announcement of the merging, subsuming, scrapping, and relocation of several agencies, one of which was PTAD.

    With this, the administration of pensioners under DBS was scheduled to be subsumed under the Ministry of Finance

    Members of the Nigerian Union of Pensioners (NUP) panicked, crying that they didn’t want to return to ‘Egypt’ where payment of their pensions and gratuities would be at the whims and caprices of fraudulent civil servants and government was flooded with allegations of misappropriation of pension funds, neglect of pensioner’s welfare and other malfeasance.

    While clamour for the Directorate not to be scrapped was on, PTAD continued to address the pensioner’s challenges.

    During the year under review, the Directorate in a report stated that it had been Managing Pensioners Files/Records, Verification of Pensioners; Computation or Calculation of Pension Benefits; Settlement/Payment of Pension Arrears; 33 Per Cent Arrears; Death Benefits; Management of the Monthly Pension Payroll; and Resolution of Pensioners’ Complaints.

    The report added: “PTAD has reorganised, repackaged and archived pensioner’s personnel files and verification files. In the same vein, PTAD created a field verification process that respects the dignity of senior citizens. Multiple verification centres were used so that crowds would not be too large and a simple four step process from arrival to completion of verification, to minimise stress was achieved.

    “The DBS on the other hand is also secured. PTAD inherited 268,897 pensioners on payrolls of the Old Pension Offices at inception. Through verification, PTAD has created a centralised database, complete with pensioner’s personal information, biometrics, and career documents. The database is the first of its kind in DBS history and as such its integrity is paramount.”

    Towards the end of November, a new Executive Secretary of PTAD, Miss Tolulope Abiodun Odunaiya, was appointed by President Tinubu to take over from Dr. Chioma Nnenna Ejikeme, who had been in the saddle from August 2019 to November 2024.

    By December, the House of Representatives recognised PTAD’s vital role, especially in payment of pensions, gratuity and death benefits to retirees of the Federal Government exempted from the Contributory Pension Scheme (CPS).

    The House Committee on Pensions, led by its Chairman, Hussaini Mohammed Jallo, was established to support the Directorate, ensure accountability and transparency, facilitate collaboration and above all, appropriate the needed funds to take care of the pensioners under PTAD’s jurisdiction.

    Jallo and other members of the Committee congratulated Odunaiya on her appointment as the Executive Secretary of PTAD, and enjoined her to work with the Committee to address the challenges and overcome obstacles to enhance service delivery and public satisfaction, as well as uphold the highest standards of integrity.

    He pledged that they would drive positive change and excellence not only to PTAD, but to the pension industry as a whole,” the chairman added.

    Executive Secretary of PTAD, Tolulope Odunaiya, expressed her appreciation to the Committee for their support to the Directorate and pledged to continue in the giant strides laid and ensure that the relationship between the Directorate and the Committee remained cordial and beneficial to the pensioners

    The PTAD boss informed the Committee of the Directorate’s achievements since they last visited, which in addition to regular payment of monthly pension include the opening a new state office in Ilorin, Kwara State; payment of arrears to some pensioners in line with approval from the National Salaries, Incomes and Wages Commission; and gratuities and death benefits to pensioners and Next-of-Kin of deceased pensioners.

    Challenges

    But both schemes are not without challenges. In the CPS, inflation continues to erode the purchasing power of pensioners, but PenCom is seeking innovative solutions to address this issue.

    Oloworaran stated that the progress achieved demonstrates the strength of the contributory pension system, but they are not without challenges.

    “Inflation, for instance, continues to erode the purchasing power of pensioners, and we are actively seeking innovative solutions to address this issue.

    “We also continue to face the persistent issue of delays in the payment of accrued rights. Recently, N44 billion was approved under the 2024 budget appropriation to settle accrued pension rights for retirees from March to September 2023. Moving forward, we are working with the Federal Government to put in place a sustainable solution that ensures retirees receive their benefits promptly and without undue stress.

    For PTAD, Odunaiya noted that a Benefits Computation System was created to make it easier to calculate pensioners’ benefits with minimum manual interference.

    “The Payroll Management System helps with managing changes/updates to the monthly pension payments. The payroll is then uploaded to the government-approved GIFMIS platform for payments to pensioners. Monthly Pension as at December 2022,” she added.

    Key Enablers

    The key enabler for the success of pension administration recorded so far has been technology and political will of the government.

    Technology has played a vital role in sanitising the pension system. Without technology there would have still been people manipulating the system to their advantage and throwing the system into chaos.

    Oloworanran said PenCom has been paving the way for a future where pension schemes becomes more accessible, reliable, and sustainable as the commission integrate technology across every aspect of the pension industry—ranging from data and identity management to seamless contributions, investment oversight, regulatory supervision, and service delivery,

    For Odunaiya, their success is not just as the result of deploying information technology, more critically it has been as a result of political will and strong support from the current administration and key stakeholders; strategic and strong leadership at the helm of PTAD; efficient and effective deployment of available of resources and human capital, and the investment in human capital development; creativity, initiative, passion, commitment and empathy of PTAD management and staff; and collaboration and support from pensioners and their union representatives.

    The Directorate’s “I AM ALIVE Confirmation Solution” has been slated for database cleanup. Launched April 2023, so far 50,553 pensioners have been confirmed “Alive”.

    Outlook 2025

    It is expected that there will be technological advancement in the industry in 2025, that will further tighten and strengthen the pension schemes.

    Oloworaran said: “In 2025, we are going to strengthen compliance, enhance service delivery, diversify pension assets to optimise returns, improve benefits, and expand coverage to include more Nigerians, especially those in the informal sector through micro pensions.

    “As we integrate technology across every aspect of the pension industry—ranging from data and identity management to seamless contributions, investment oversight, regulatory supervision, and service delivery—we are paving the way for a future where the Contributory Pension Scheme (CPS) becomes more accessible, reliable, and sustainable.

    “However, this transformation cannot succeed without your unwavering support as media practitioners. Your role in amplifying our initiatives and educating stakeholders across Nigeria is essential to achieving this vision”, she added.

    For PTAD, Odunaiya pointed out that there will be improved welfare for the DBS pensioners, including access to health insurance for pensioners; increased coverage across Nigeria – opening more state offices; harmonisation of pensions to enable pensioners who retired on the same grade level and step under the same organisation at various years earn a unified pension for equity; and implement Constitutional provision of five yearly pension increment due in the past year.

  • Lagos workers acquire skills for pension administration

    Lagos workers acquire skills for pension administration

    Governments and employers, who fail to accept the welfare of the people as the ultimate law, is at the risk of ruining its stewardships and the trust of the citizens in governance, Governor Akinwunmi Ambode has said.

    He added that employers, who deny this run the undeniable risk of ruining their enterprise, the trust and the devotion of their employees.

    The governor made this statements at the opening session of a workshop tagged: “Vital Interpersonal Skills for Pension Administrators”, organised by the Civil Service Pensions Office (CSPO) of the Lagos State Ministry of Establishments, Training and Pensions in Lagos.

    Ambode, who was represented by Commissioner for Establishments, Training and Pensions, Dr. Akintola Benson, said Lagos State government is one of the most notable governments that believe in this ideal, adding that the unrivalled dedication of the state to the welfare of its workforce both during and after service cannot be overemphasised.

    The commissioner said Governor Ambode mandated his ministry to embark on a continuous training of members of staff of the ministry in order to ensure the delivery of top quality service to officers of the civil service.

    The training, he said, was dedicated to the need to inculcate and sharpen the vital interpersonal skills that officers of the Civil Service Pensions Office require to properly serve pensioners and retirees of the state civil service.

    He said: “In addition to fulfilling my duties charged with the responsibility for ensuring the adequate exposure of the civil service to knowledge on an on going basis, the activities that have been carried out signify and underscore the Governor’s commitment to all matters relating to the welfare of staff, retirees, and pensioners in Lagos State.

    “In aiming to call attention to, and aid the development of, the vital interpersonal skills that are vital for pension administrators, our training will focus on the skills that are not learnt in schools, but are important though, rarely visible. These are the skills that are less tangible, harder to quantify, challenging to teach and, sometimes, difficult to describe. They include attributes such as etiquette, getting along with others, listening and engaging in small talk. Without doubt, these skills are related to the concept of ‘employability’, but they are also related to the concepts of effectiveness and efficiency.”

    He continued:“Clearly, possessing the right attitude to work is a soft skill that is not taught in the universities and other formal schools. This is, therefore, an attempt to help officers of the Civil Service Pensions Office develop the skills that are necessary for success. The training will also fully assist the participating officers to appreciate and acquire the benefits that skills training brings to bear on the attainment of the strategic objectives of the government and the effectiveness of the institutions of the civil service. It will also help pension administrators in the CSPO benefit from having officers, who are able to make critical observations.”

  • Lagos harps on efficient pension administration

    LAGOS State Governor Akinwunmi Ambode has identified poor administration as the bane of pension in the country.

    He spoke at the opening ceremony of the training for senior staff members of the state Civil Service.

    The event titled: ‘Digital and electronic administration of pensions in Lagos State’ was organised by Civil Service Pensions Office of the Ministry of Establishments, Training and Pensions.

    Ambode, represented by the Commissioner, Lagos State Ministry Of Establishments, Training And Pensions, Dr. Benson Oke, said the problem had resulted in huge pension arrears and untold hardship for pensioners, adding that this called for reforms.

    He said the government is aiming at the sustainability of digital and electronic mechanisms and innovation  in its Civil Service Pensions Office (CSPO).

    He said digital and electronic administration of pensions was crucial to effective and efficient administration of pension in the state.

    Ambode explained that the CSPO had been  responsible for processing of terminal benefits of staff who exit the system either statutory or voluntary retirement, noting that this is for pensioners who disengage on the “Pay As You Go” Scheme.

    Also, he said the CSPO is responsible for processing of payment of pensions and gratuities, maintaining comprehensive and up-to-date personnel records for pensioners of the civil service, among others.

    Ambode said in line with the recognised need for reforms, the government was committed to the task of ensuring a better and more effective pension administration system.

    He said it was to this end that the CSPO put in place various measures to ease the burden of retirees and ensure their comfort, he added.

    He urged the participants at the training to be prepared to deliver value to to pension administration in the State through digital and electronic measures.

    ‘’I am therefore confident that the participants at this training will be exposed to a considerable body of knowledge that will stand them in good stead to assume positions of responsibilities in the near future and to sustain the pace, level, and scope of innovation at the CSPO,’’ he said.

  • Ogun, administrators affirm commitment to pension administration

    Ogun, administrators affirm commitment to pension administration

    The Ogun State Government has told Pension Fund Administrators (PFAs) handling the Contributory Pension Scheme (CPS) of Local Governments and State Universal Basic Education Board (SUBEB) workers  to rise up to their responsibility and build an harmonious relationship with their clients.

    The Permanent Secretary, Bureau of Local Government Pensions, Mr. Ayotunde Kolawole, gave this vice at a meeting between the Bureau and representatives of all PFAs covering the State at the Bureau’s office in Abeokuta, the state capital.

    Kolawole told the PFAs to always be available and accessible to serving employees and retirees, saying this could only be possible if the PFAs have adequate personnel with functional offices in the state capital as provided for in the relevant section of the Pension Reform Law.

    He said as part of the Bureau’s monitoring and supervisory roles, it would begin to pay unscheduled visits to the PFAs offices to ascertain the level of compliance of this section of the Law by the PFAs.

    The present administration, he said, was committed to making life after service more enjoyable for retirees, urging the PFAs to collaborate with the state government in order to achieve the set goals.

  • TUC urges strengthened pension administration

    The Trade Union Congress (TUC) of Nigeria has said it will soon mobilise workers and pensioners to mount serious pressure on the government for prompt and adequate payment of pensions to retirees in the country.

    Its President, Comrade Bobboi Bala Kaigama, who noted this in his independence day message, said the pressure was necessary in order to strengthen pension administration in Nigeria. He lamented the increasing cases of embezzlement of pension funds with no one being brought to book to account for the criminal act.

    “Why a few individuals should be feeding fat on the misery of the poor and hapless pensioners remains a mystery to us. Pensioners’ woes are made worse by the virtual collapse of social services, which in effect has turned every household into a mini-government on its own.

    “Incidentally the pain is more excruciating because monetary contributions are deducted from workers’ salaries into the pension funds unlike what obtained in the past when government paid from its coffers. In this milieu, retirement aggregates to being sentenced to permanent poverty or even death, except in the case of the privileged few in the society. This ugly trend must stop,” he said.