The Nation Newspaper

Tag: pension fund

  • About N1.6tr pension fund underutilised

    About N1.6 trillion pension fund, representing 20 per cent of the total N7.94trillion  available for investment in infrastructure and instruments has remained untapped, The Nation has learnt.

    It was gathered that out of the N1.6 trillion earmarked for investment, less than 5 per cent is being utilised, amounting to over N1 billion.

    The fund has remained underutilised owing to lack of bankable infrastructure projects and instrument in the country.

    PenCom Acting Director-General, Mrs. Aisha Dahiru-Umar, who spoke at the Chartered Insurance Institute of Nigeria (CIIN) 2018 June Edition Breakfast Seminar in Lagos, said there are few qualified infrastructure projects and instruments making allocated funds are to be under-utilised.

    Mrs. Dahiru-Umar, who was represented at the event by PenCom’s Head, Contribution & Bond Redemption Department, Olulana Loyinmi, noted that pension fund is available for development of infrastructure, stressing that the fund remains a veritable tool to enhance economic development.

    Speaking on investment philosophy and economic development, she pointed out that economic development is sustained growth and increase in social well-being through increasing the productivity and efficiency of the economy.

    She noted that the underlying principles of investment of pension funds is to maintain safety and generate fair returns to ensure that retirees receive their retirement benefits as and when due.

    The Pension Reform Act (PRA) 2014 and investment regulations, she said, targeted critical areas towards economic growth and development, adding that the impact of pension fund on economic development is huge.

    She said: “Pension fund has improved the savings culture of workers and constituted a pool for investment. Total pension asset valued at N7.94 trillion as at March 2018 currently available as pool of potential capital for economic development. Relative importance depicted by proportion of pension assets to Nigeria’s gross domestic product (GDP) is estimated at 6.54 per cent as at March 2018. The fund had provided capital that further deepened the financial markets

    “The fund has been an active player in the activation of the domestic bond market through steering committee, holds sizeable percentage of fixed income securities, mostly government bonds and it has increased depth of bond markets with 47 per cent of Federal Government Bond stock of N7,564.94 billion held by Pension funds at 31/12/16 – DMO

    “Other impact of pension fund include: housing and mortgage development; facilitating affordable housing; PRA 2014 makes provision for a portion of pension fund in RSA to fund equity contribution for a residential mortgage; promotion of Nigeria Mortgage Refinancing Company; indirect investment in housing/real estate through ABS/MBS, REITs and infrastructure financing.

    “It also include making pension fund available for development infrastructure as a veritable step to enhance economic development. At least, 20 per cent of pension portfolio is available for infrastructure financing.”

    According to her, the key challenges in the investment of the fund are limited investment outlets in number of quoted equities that meet investment criteria.

    “There are few qualified infrastructure projects and instruments such that allocated funds are underutilised. Over 20 per cent available while under 5 per cent is utilised. Low liquidity, inadequate credit risk rating, crowding effect, among others, have hampered the growth of local corporate bonds while pension funds concentrated in government securities,” she said.

    She canvassed the creation of more investment outlets – infrastructure bond/funds with appropriate credit enhancements.

    CIIN President, Funmi Babington-Ashaye, said annuity and pension funds constitute a major source of institutional investments in Nigeria.

    She added that such funds, which are long term in nature, can be channeled for development of much needed infrastructure in Nigeria and such infrastructure include transportation, communication, water and electricity.

  • Pension fund hits N7.51trn

    Nigeria’s pension fund assets has grown to N7.51 trillion as at 31 December, 2017, a report by the National Pension Commission (PenCom), has shown.

    The report tilted, “2017 Fourth Quarter Pension Summary Report,” stated that the total value of pension fund assets which is based on unaudited valuation reports of the pension funds, grew from N7.16 trillion as at 30 September, 2017 to the N7.52 trillion as at 31 December, 2017, representing a growth of 4.90 per cent, or N350.74 billion.

    The growth indicates a higher per cent growth rate compared to the 4.85 per cent for the previous quarter.

    According to the Commission, the increased asset growth recorded in the fourth quarter of 2017 was mainly due to market valuation of quoted equities and the slightly higher pension contributions in the period relative to the previous quarter.

    A breakdown of the pension assets showed that as at fourth quarter 2017, Retirement Savings Account (RSA) active fund constituted the largest proportion of the total pension fund, accounting for 68.05 per cent, or N5.11 trillion of total fund.

    On the other hand, the Closed Pension Fund Account (CPFAs) and AES’ assets, stood at N1.01 trillion and N828.15 billion representing 13.42 per cent and 11.02 per cent of the total assets respectively. The RSA Retiree Funds which stood at N564.12 billion represented 7.51 per cent of the total assets.

    Meanwhile, the pension industry portfolio showed that the pension fund assets were mainly invested in Federal Government’s Securities, with actual assets allocation of 70.4 per cent of total pension assets.

    Out of this investment, 53.8 per cent was invested in FGN Bonds, Treasury Bills got 15.7 per cent, Agency Bonds 0.1 per cent, Sukuk Bonds 0.8 per cent and Green Bonds 0.1 per cent,  slightly lower than the 71.9 per cent recorded in the third quarter of 2017, the report indicated.

     

  • Pension fund hits N7.2tr

    Pension fund hits N7.2tr

    Nigeria’s pension fund assets under the  Contributory Pension Scheme (CPS) have hit N7.164 trillion– as at September  from the N7.094 trillion recorded in August.

    The increase in the assets represents a 21.34 percentage growth and N1.26 billion increase.

    But despite this achievement, reports show that a lot may still be wrong with investing the fund for Nigeria’s infrastructural development.

    Investigation by The Nation showed that although the fund is not growing as projected by the commission owing to recession, the pension fund may in few years reach N10 trillion mark going by the projected average growth of N30 billion.

    This was shown in the September Summary of Pension Fund Assets Report released by the National Pension Commission (PenCom).

    According to the report, only N5.235 billion is recorded as infrastructure fund, a wide gap from the Federal Government Bonds which received the larger chunk of the fund.

    The report showed that a total of N3.874 trillion out of the total N7.16 trillion was invested in FGN bonds in the period under review.

    Treasury bill received  the second largest chunk of the fund with N1.27 trillion. The investment in this area is  lower than the N1.31 trillion in the period under review.

    State government bonds, however, got N155.7 billion, Agency Bonds (NMRC and FMBN) got N5.85 billion, Corporate Debt Securities got N264.7 billion while Supra-National Bonds got N11.73 billion

    The pattern of investment shows that Pension Fund Administrators (PFAs) have great confidence in FGN Securities.

    In the Local Money Market, a total of N489.57 billion was invested in the bank while N55.417 billion was invested in commercial papers.

    Under Mutual funds, infrastructure funds got N5.235 billion, cash and other assets got N27.33 billion; and real estates got N208.71 billion.

    The sum of N501.43 billion representing 7.06 per cent of the fund was invested in local money market securities. The fund was invested in banks as fixed deposit and commercial papers. The percentage invested this year in this area dropped from 7.5 per cent to 7.06 per cent between August 2016 and August 2017.

     

  • Jonathan denies receiving N5b from pension fund

    Jonathan denies receiving N5b from pension fund

    FORMER President Goodluck Jonathan has denied ever receiving any money from the controversial Pension Fund.

    Media adviser to the former president, Mr. Ikechukwu Eze dissociated the former President from allegations which accused an ‘Ex-President’ of being paid N5 billion monthly from the Pension Fund.

    The claim credited to the Attorney General of the Federation and

    Minister of Justice, Abubakar Malami, had alleged that the chief legal officer to the federation had told a Senate ad-hoc committee that an “Ex-President was taking N5 billion monthly from the Pension Fund.”

    In debunking the claim, Eze dismissed it as “a blatant lie hurriedly cooked up to divert the attention of the general public from the raging ‘Mainagate’ and other embarrassing scandals.”

    According to Eze, “we believe that the story was concocted as part of the unfolding grand design to always dodge responsibility and blame every evil act taking place in the present dispensation on the past Jonathan administration.”

  • Insurance firms yet to return Fed Govt’s N25b pension fund, says PTAD

    Insurance firms yet to return Fed Govt’s N25b pension fund, says PTAD

    Over N25 billion of  pension funds from the Defined Benefit Scheme (DBS) is still being owed by some insurance firms, the Executive Secretary, Pension Transitional Arrangement Directorate (PTAD), Mrs Sharon Ikeazor, has said.

    She was highlighting  the progress made by the Directorate in her 11 years of assuming office as the Executive Secretary at the just concluded 20117 Conference of the National Association of Insurance and Pension Correspondents in Lagos.

    Nine out of 12 firms are holding the funds. The one year deadline given to the defaulting firms would expire next month.

    Mrs Ikeazor said the PTAD had given the insurance companies one year  to repay the monies owed, considering that the monies had been with them since 2015 and they knew they were to hand over to PTAD since then.

    According to her, PTAD is liaising with the National Insurance Commission (NAICOM) for regulatory support as it may be compelled to take legal action and include the Attorney-General of the Federation and agencies such as the Economic and Financial Crimes Commission (EFCC) and Independent Corrupt Practices Commission (ICPC) to help recover the funds.

    She stressed that while some of the affected companies had complied, some of them said they would not be able to meet the December deadline .

    She said: “Among companies that have complied are Leadway Assurance with full payment of N33.3 million and  AIICO Insurance, which complied in form of transferring properties and investments worth N1.5 billion.

    “NICON Insurance substantially complied transferring fixed assets worth N13 billion to PTAD. The value placed on them are yet to be verified and reconciled. The Federal Ministry of Works and Housing is carrying out the valuation of those assets to determine their actual value. As at 31st August, 2017, the sum of N6.422 billion is in the Legacy Fund (e-payment) with the Central Bank of Nigeria.

    “PTAD has entered the enforcement stage in the recovery process against defaulting insurance companies. The final Demand Notice was served in October.”

    She urge the defaulting companies holding legacy funds to pay up to enable the PTAD deal promptly with the inherited liabilities.

    She listed the Directorate’s areas of success since she assumed office as prompt payment of monthly pensions; completion of the verification process for the civil service and parastatals; automation of the pension payment processes and the use of Government-Integrated Financial Management System (GIFMIS) and tackling pension scammers and fraudsters.

    The Directorate, she said, has also paid outstanding arrears, including the 33 per cent arrears and recovery of legacy funds from insurance companies.

  • The National Association of Nigeria‎n Students (NANS), has written to President Muhammadu Buhari, calling for an open public investigation into looted pension fund.

    In a letter to the President dated November 2, 2017 and signed by its President, Comrade Aruna Kadiri‎, said‎ though, the decision of the President to disengage Maina from service was as a result of misleading report presented to him by those who supposed to feed him with detailed development across the country.

    The NANS President said, “The decision was hasty and generally not of the interest of Nigerians. As a body of intellectualism, we observed that there is a ganged up against Mr Abdulrasheed Abdullahi Maina who was the chairman of the defunct Pension Reform Taskforce Team, PRTT under the Goodluck Jonathan’s administration.

    “The PRTT has Economic and Financial Crime Commission, EFCC, the Independent Corrupt Practices and other offenses Related Commission, ICPC, the Department of State Security , DSS, the National Intelligence Agency, NIA, the Nigeria Police Force, the Accountant General of the Federation, the Auditor General of the Federation, the Federal Ministry of Finance among others.

    “We, as Nigerians can not be clouded by the diversionary method of the cabal to shift our minds from the N1.6 trillion to N2.1 billion. We also gathered that, immediately Mr Maina’s PRTT was disbanded, the then government created Pension Transitional Arrangement Directorate (PTAD). PTAD discontinued the on going biometric supervised by the PRTT and got approval of N8bn for the same biometric which up till now, is yet to be carried out.

    “The Director of Finance of Maina’s led PRTT is now the Director of pension in PTAD while Mr Ibrahim Lamorde of the EFCC heads the Police Special Fraud unit in Lagos. We believed that it is not possible for the chairman to steal such huge amount without the finance director and other team members if they actually stole public fund. Nigerians want to know the whereabouts of the N1.6 trillion recovered and the N5.32bn blocked by Mr Maina and his team in the head of service and police.”

    Comrade Kadiri also said, “Since the EFCC and ICPC were members of the Maina’s committee, and as well implicated in the looted treasury, an independent investigative panel be set up to properly investigate the allegations and counter allegations. An investigative panel with live coverage which will boost the anti corruption war of your administration will be highly appreciated by Nigerians.

    “For the sake of justice, equity and fairness, we also advice and recommend that your Excellency immediately reabsorb Mr Maina pending the outcome of the public investigation and if found wanting be properly prosecuted.”

  • ‘Kogi N4bn pension fund diverted to private pockets’

    ‘Kogi N4bn pension fund diverted to private pockets’

    The Auditor-General of Kogi State and chairman, technical committee, state pension reform, Alhaji Yakubu Okala has revealed that N4 billion belonging to pensioners in the state was diverted into private pockets between 2010 and 2015.

    This he said was perpetrated by few individuals saddled with the responsibility of handling the pension funds.
    Okala who made this known on Thursday in Lokoja during a stakeholders meeting heralding the new contributory pension scheme by the state government said that all those that were involved in the pension fraud will be apprehended and brought to justice.

    According to him, embezzlement of the funds in the state has thrown pensioners into a piteous condition to the point that many of them were ashamed of being identified as retired civil servants.

    He added: “Pensioners at the local government level are worst hit by the fraudulent act. Investigation on the councils’ pension is on-going and we must see it to the end.

    “Government has tried its best in releasing money for the payment of pension in the state, but the handlers have failed woefully.”

    He lamented that in 2007, a pension reform bill was sent to the State House of Assembly, and passed into law, but that the scheme did not commence until after ten years as a result of lack of political will by previous administrations.

    He called on the civil servants at the state and local government levels to key into the new contributory pension scheme in order to better their lives after retirement.

    He commended Governor Yahaya Bello for his courage in actualising the new contributory pension scheme for civil servants in the state.

    The chairperson of the state pension bureau, Hajia Sa’adatu Atima explained that for the success of the new pension scheme, the state government will contribute 10 percent while individual workers will contribute eight percent.

    She described the scheme as safe and laudable, urging workers in the state to key into it.

  • Pension fund hits N6.6 tr

    Pension fund hits N6.6 tr

    •PenCom to lawmakers, others: don’t undermine pension reform

    Pension fund assets under the Contributory Pension Scheme (CPS) has hit N6.6 trillion, the National Pension Commission (PenCom) Acting Director-General, Mrs. Aisha Dahir-Umar, has said.

    She made this known a paper titled: “Position paper on the Bill for an Act to Amend the Pension Reform Act, 2014 to Exclude Some Government Agencies from the Application of the (CPS) she presented at the Public Hearing organised by the Committee on Pensions, House of Representatives on the proposed controversial pension bills in Abuja.

    She lamented that despite these achievements, there had been  measures aimed at undermining the pension reform.

    She said there was need to consolidate the gains of the CPS and avoid policy reversals and that this could undermine public confidence and impact the  economy and Federal Government’s change agenda and economic recovery plans.

    Mrs Dahir-Umar, who said the total pension fund assets hit N6.42 trillion by last March, added that the fund grew by about N30 billion.

    She said the total pension assets were equal to about six per cent of the Nigerian rebased Gross Domestic Products (GDP).

    Similarly, the number of registered contributors grew to 7.4 million as at March, representing about 7.45 per cent of total labour force  and 3.95 per cent of total population.

    She pointed out that the pool of pension fund generated by the CPS has aided the deepening of Nigeria’s financial sector and provided a platform for attaining strategic programmes of government in infrastructure, housing and the development of the real sector of the economy.

    Besides she said, the CPS has simplified the payment of retirement benefits by issuing effective regulations and guidelines.

    She further said over 184,979 retired under the scheme during the period under review and are receiving pensions as and when due with an average monthly pension payment of N6.7 billion during the same period.

    She added that the pension reform has gained public confidence and acceptability within the short period of its implementation.

    The private sector, which hitherto was apprehensive of the CPS as a ploy by the public sector to raise funds to address its huge pension liabilities, has come to accept and is  implementing the reform. About 200,000 private sector employers are implementing the CPS and have contributed about 60 per cent of the total pension fund assets, she added.

    She said: “The CPS has also introduced transparency and integrity in the pension administration system. From inception of the reform to date, there had not been a single incidence of fraud or mismanagement of the pension funds and assets under the Scheme among other achievements.

    “In spite of these achievements, however, there have been recent actions, both legislative and administrative, aimed at undermining the pension reform in Nigeria. Exempting some government agencies would lead to divestment from FGN securities before maturity, which would have ripple negative effects on not only the finances of government, but on the entire financial system.”

    The Acting DG said another negative impact of exempting these agencies is the erosion of the pool of long-term investible funds accumulated under the CPS, suitable for economic development of any nation as illustrated in other jurisdictions, including developed economies.

    She observed that this would undermine the process of attaining development initiatives in the infrastructure, housing and real sectors of the economy, hinged on the utilisation of a portion of the pool of pension fund assets.

    “It would also be contrary to public policy for the Federal Government to succumb to the clamour for exemption of its employees from the CPS, which has so far proven to be efficient, effective and beneficial as a pension administration system. Indeed, it is the benefits of the CPS that are attracting increasing number of State Governments in Nigeria as well as other African countries to adopt and implement the Scheme in favour of their respective employees,” she added.

     

  • ‘Insurance firms owe N19.7b pension fund’

    ‘Insurance firms owe N19.7b pension fund’

    The Pension Transitional Arrangement Directorate (PTAD) yesterday accused insurance firms of failing to  remit pension funds totaling N19.7billion.

    Its Executive Secretary, Sharon Ikeazor who spoke at a news conference in Abuja, said only Leadway Assurance has successfully transferred the funds in its kitty to the the e-collection account of the agency with the Central Bank of Nigeria (CBN).

    She also explained that the implementation of the report of the staff audit conducted by the office of the Head of Service for the agency was ongoing and did not rule out the possibility of the five Directors fired recently  from the agency being made to refund some money to government.

    She said the agency saddled with the responsibility of handling pension matters under the Defined Benefit Scheme is working with the Minister of Finance to ensure that all outstanding legacy funds are transferred to the agency in order to have money to defray some of the liabilities arising from the non payment of pensions.

    She said the government will determine wha action to take against the insurance companies that have held the agency to ransom by failing to transfer the funds to the agency.

    Ikeazor said: “The Pension Reform Act 2014 mandated PTAD to take over all pension assets, funds and liabilities of erstwhile Pension Offices and Boards of Parastatals. While these offices and boards have been quick to transfer liabilities to PTAD, the funds and assets have not been forthcoming. We have not been able to access funds to pay our arrears.

    “Since PTAD took over the pension management of parastatals such as universities and colleges of education in August 2015, legacy pension funds amounting to N19, 137,694,619.94 have remained in the custody of the insurance companies.

    “We have issued demand notices on the companies involved, demanding for the transfer of these outstanding funds into our dedicated e-collection account with the CBN. Till date, only Leadway Assurance has paid funds in its custody.

    “We are working closely with the Minister of Finance to ensure that all outstanding legacy funds are transferred to us. This would enable us to defray some of government’s liabilities arising from the non-payment of pensions.”

    She explained that the agency has handed one suspected pension fraudster to the Independent Corrupt Practices Commission (ICPC) for prosecution, while working with the Economic and Financial Crimes Commission (EFCC) and others keying into the government whistle blower (policy),

    “It is no secret that fraudsters would do all they can to defraud innocent people or the system. This had been the case here in PTAD. All reported fraud cases are reported to the ICPC for their investigation and prosecution where applicable.

    “Our collaboration with the ICPC has led to the detention of persons impersonating pensioners who present themselves for verification.

  • Pension fund grows by N1.25tr in one year

    Pension fund grows by N1.25tr in one year

    The  pension fund grew from N4.61 trillion to N5.46 trillion between March 2015 and March 31, 2016, The Nation has learnt.

    The growth between the first quarter 2015 and first quarter (Q1) 2016 represents 18.4 per cent (N0.85 trillion) in one year.

    The fund has however grown to N5.96 trillion as at September last year.

    This was contained in the National Pension Commission (PenCom) Quarterly Pension Industry Statistics released to journalists in Lagos. The industry witnessed 7.86 per cent growth in the Contributory Pension Scheme (CPS) membership during Q1 2016 as it recorded 7,071,791 contributors from 6,515,736 contributors it recorded in the preceding year.

    Further analyses showed that the total monthly pension contribution made by contributors from both the public and private sectors into the RSAs of employees was N3.55 trillion as at the end of first quarter last year, an increase from N2.95 trillion as at the end of first quarter of the previous year.

    This showed an increase of N0.6 trillion representing 16.9 per cent over the total contributions as at the end of the previous year.

    Giving an update on the recovery of outstanding pension contributions and interest penalty from defaulting employers, the commission said it made a recovery of N348.81 million during the period under review as against N540.94 million recovered in 2015.

    Surprisingly, many state governments did not implement the Contributory Pension Scheme (CPS) in their states as shown in the report. As at the end of Q1 2015, 26 state governments had enacted their pension laws with 10 states at the Bill stage. However, as at the end of Q1 2016, the number of states that have enacted laws on the CPS remained the same.

    PenCom also disclosed that the total number of retirees on Programmed Withdrawal (PW) increased from 106,421 in Q1 2015 to 132,405 in Q1 2016.

    The 25,984 increase represents 24.4 per cent from the figure recorded in the previous year

    Similarly, the lump sum withdrawals within the quarter stood at N12.63 billion with an average of N4.36 billion paid monthly to the retirees of the scheme as monthly Programmed Withdrawal as at the end of the reporting period. This showed an increase from the N2.55 billion recorded in Q1 2015.

    As regard the second pension payment option plan, Life Annuity, the Commission approved a total of 3,288 applications for annuity retirement plan as against the 1,914 applications received in 2015. This brings the total number of retirees receiving their retirement benefits through the annuity plan to 29,620 as at Q1 2016.

    The 3,288 retirees received N3.96 billion as lump sum payment and paid annuity premium of N15.44 billion cumulating to a total of N41.85 billion and N145.04 billion as lump sum payments and annuity premium respectively. The retirees received average monthly annuity of N1.51 billion as at the end of March last year.

    In 2015, a total premium of N79.18 billion was approved for payment to insurance companies on behalf of the 15,976 retirees in return for monthly payments amounting to N790.10 million 3.6 Approval of Death Benefits.

    The Commission also approved death benefit of 2,006 deceased employees with total value of N6.24 billion for payment to the beneficiaries and administrators of the deceased employees in 2016.

    In 2015, however, approvals were given for the payment of N4.44 billion as death benefits to the Next of Kins (NoKs) of 1,450 deceased employees

    Cumulatively, a total of N100.52 billion was paid as death benefits (including life insurance) of 34,410 deceased employees from both the private and public sectors as at the end of first quarter, 2016.