The Nation Newspaper

Tag: pension

  • 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.”

  • Use pension funds to address infrastructure, Oteh urges

    The National Pension Commission (PenCom), should avail the Federal Government of its  N4.5 trillion pension fund  to  end the current infrastructural deficit estimated at $2.9 trillion (N485 trillion), Director-General, Securities and Exchange Commission, Ms Arunma Oteh, has urged.

    Oteh,who described the country’s infrastructure  deficit as a national emergency, spoke at the just concluded PenCom conference on Pension Reform Act 2014 in Lagos.

    She however stated that the country also needs a world class, stable and well regulated capital market to safeguard the funds.

    She said housing is critical to the nation’s development and the government needs 17 million housing units as against the 50, 000 people that have access to housing, noting that housing is not just about shelter, but creating jobs in the country.

    She urges the PenCom Director-General, Mrs. Chinelo Anohu-Amazu to be creative about how to deploy the fund in the next 10 years so that it is not business as usual.

    She said: “Nigeria’s current challenge include huge infrastructure deficit, homing and jobs. I believe infrastructure is a national emergency for us and we can learn from countries like Ireland, Canada and Australia which have modeled their pension fund on nation’s growth.

    “Business owners consistently rack in  inadequate infrastructure and that is why fixing infrastructure will spur economic growth. The Federal Government recognises this and recently put together the National Integrated Infrastructure Master Plan (NIIMP) which estimate that we need US$2.9 (N485 trillion) over the next 30 years”.

    The SEC boss said this showed that there is a lot of work to be done, noting that this makes a strong case for what the DG PenCom can do.

    “I am not saying we should put the entire fund on infrastructure and others but I am saying let us put our money where our mouth and if we do it in a safe and sustainable manner, it will impact on nation’s growth, she said.

  • Nigeria yet to achieve contributory pension objectives

    About 10 years after the enactment of the Pension Reform Act, 2004, which introduced contributory pension scheme in Nigeria, Pension Lawyers Association of Nigeria (PLAN) has said that Nigeria is still far from achieving the core objectives of the Pension Reform Act, 2004 repealed by the Pension Reform Act 2014.

    President of the Association, MbanugoUdenze, who spoke in Lagos said that the decision of the government to carry out a review of the Pension Reform Act 2004 was a right step in the right direction.

    According to him, apart from portraying Nigeria as a dynamic society, which undertakes periodic review of legislations to reflect current realities in the socio- political economy, the review also brought about some innovations in the new legislation, which were absent in the old one.

    He however said that it is one thing to have a good legislation, it is yet a different thing for such  legislation to adequately address the issues for which it was enacted.

    Udenze, who is also a senior lawyer and principal partner, MbanugoUdenze& Co, Barristers, Solicitors and Notary Public, said there is a great wall of difference between a fantastic legislation and the practical aspect of it, which is the implementation. He said: “Yes it is a codified law, which is good but the major thing is to see its full implementation. So in my opinion something should be done in respect of its implementation because that is how the objectives of the reforms can be achieved.

    “The Pension Reform Act 2014, which as a matter of fact is an improvement on the 2004 Act, is still work in progress because a lot of work need to be done on the part of the employers in order to ensure that the core objectives are achieved.”

    He noted that less than 10 percent of the citizens for whom the pension scheme is meant to cover are yet to be covered under it.

    He said out of Nigeria’s population of about 170 million people, it is estimated that 30 to 40 percent of this 170 million people constitutes the working class, who the pension scheme is meant to cover, who are also the productive class.

    He argued that among the 170 million population in Nigeria, I am sure that about 30 to 40 percent of them that can be said to be productive and within this 30 to 40 percent working class, how many of them are covered by this pension scheme? I think it is less than 10 percent and this is how you measure whether the core objectives of this Act have been achieved.

    To address this challenge, he said  there should be an aggressive enlightenment of the Nigerian public by the National Pension Commission (PenCom) on the need to be covered under the new pension scheme.

    He called on operators in the private sector to also embrace the new scheme, which he described as the best thing to happen to administration of pension in Nigeria.

    While responding to allegations that some employers of labour, especially in the private sector do not remit deductions regularly to the employees’ pension accounts, he charged the employees to always demand for updates on their accounts, which will keep their employers on their toes to ensure they remit deductions.

    He lauded the Federal Government on the new Pension Reform Act 2014, which he said is an improvement on the first legislation, the Pension Reform Act, 2004, as it introduced some innovations that would engender the achievement of the objectives of the legislation.

    “Some of these innovations include the increase in the contribution of the employers and employees from 7.5 percent flat contribution each on the part of both to ten percent for the employer and eight percent for the employee bringing to 18 percent of the employees monthly emoluments as against the former 15 percent.

    “Secondly, the Act also provides that for private sector operators, employers of labour with a minimum of three members of staff are eligible to participate in the contributory pension scheme as against the former five members of staff provided in the Pension Reform Act 2004, among several others,” he said.

  • Private sector employers shun 18% pension contribution rate

    Private sector employers are not complying with the upward review of the pension contribution rate as stipulated by the Pension Reform Act, 2014, The Nation investigation has revealed.

    The Act reviewed upwards the minimum rate of pension contribution from 15 per cent to 18 per cent of monthly emolument.

    Following the review, eight per cent will be contributed by the employee, while 10 per cent would be borne by the employer.

    This is expected to provide additional benefits to workers’ Retirement Savings Accounts and thereby enhance their monthly pension benefits at retirement.

    The Act was signed into law by the President on 1 July 2014. The Act does not specify a commencement date. The Interpretation of the  Act provides that where no date of commencement is contained in an Act, the commencement day shall be the day the Act is passed or signed into law. Unless a commencement date is inserted before the Act is gazetted, the commencement date will be 1 July 2014.

    But while few have adjusted their company policies and effected the new rate, the majority of employers have refused to comply relying on the fact that the Act did not specify an effective date.

    Guaranty Trust Bank Spokesperson, Mrs Lola Odedina, while responding to whether or not the bank has implemented this section of the Act,  confirmed that the bank has started remitting its employees contribution based on the new rate.

    Managing Director, AIICO Pension Managers Limited, Eguarekhide Longe told The Nation that most employers from the private sector have not complied with the law.

    According to him, the employers are relying on the directive from their umbrella body, the Nigeria Employers’ Consultative Association’s (NECA) directive that they should not effect the law.

    He however, wondered if NECA has such powers to stop the implementation of the law.

    The AIICO boss said there is nothing they can do as pension fund administrators to make them comply.

    He said: “The employers are hiding under labour union and constitution saying compliance date was not clear. But compliance starts from the day the bill was assented to by the President, Goodluck Jonathan.

    “I believe the regulatory authority, the National Pension Commission (PenCom) will enforce the law and apply sanctions where necessary.

    PenCom Head Research and Corporate Strategy, Dr Farouk Aminu said the law cannot change or be delayed.

    The employers must obey the law because we are definitely going to effect the law.

    Aminu noted that the Commission will embark on sensitisation programme on the new Act in all the six-geopolitical zones in the country.

    He said the programme is starting from Lagos State on Thursday November 30 and will go round the other zones.

    He said that by the time, the commission is done with the programme, it will begin to enforce the law and sanction those who may continue to disregard it.

  • Premium Pension sends forth retiring board member

    The board and management of Premium Pension Limited, one of the pension fund administrators in the country have sent forth one of its retiring directors Mr. Ibrahim Alhassan Babayo, at a colorful luncheon ceremony held in Abuja recently.

    Chairman of the company’s board Mr. AliyuDikko in his remarks described Babayo as a very productive person who always worked with enthusiasm to uplift the company.

    He added that Babayo was an asset to the company noting that the acquisition of their head office has his strong imprints as he worked tirelessly to achieve that feat.

    Also commenting at the occasion, a member of the board Nelson Nweke described Babayo as a versatile person who is highly professional and resourceful.

    Managing Director of the company,  WilsonIdeva thanked Babayo for his immeasurable contributions and inspirational disposition towards  to the management.

    He expressed his pleasure working with him, describing him as  a special person whose advice the company immensely benefitted from.

    Responding, Babayo thanked the  foundational board members of the company for the solid foundation laid for the company to thrive in terms of good corporate governance. He expressed his deep appreciation for the warm reception accorded him as well as the cooperation of other board members over the past few years.

    Babayo joined the board of Premium Pension Limited on the 19th August, 2011. While on the board he served as Chairman of the Board Information Technology Committee and also as a member of Board Audit, Establishment and nominating committees. Babayo retired from the board of the company after successfully completing his tenure.

    The occasion also served as an opportunity to welcome back reappointed directors of the board in the persons of Architect YunusaYakubu and Mr. Usman Zarma. The chairman described them as hardworking founding fathers of Premium Pension Limited.

  • World’s top-ranked pension funds probed

    Denmark, home to the world’s top-ranked pension system, will toughen oversight of the $500 billion industry after regulators observed a surge in risk-taking linked in part to more widespread use of hedge funds, Bloomberg has reported.

    The Financial Supervisory Authority in Copenhagen will require pension funds to submit quarterly reports on their alternative investments to track their use of hedge funds, exposure to private equity and infrastructure projects. The decision follows funds’ failures to account adequately for risks in their investment strategies, according to an FSA report.

    The regulatory clampdown comes as Denmark deals with risks it says are inherent to a system due to be introduced across the European Union in 2016. The new rules will allow pension funds to invest according to a so-called prudent person model, rather than setting outright limits. In Denmark, the approach has proven problematic for the only EU country to have adopted the model, said Jan Parner, the FSA’s deputy director general for pensions.

    “The funds are setting up for their release from the quantitative requirements, but the problem is, it’s not clear what a prudent investment is,” Parner said in an interview. “The challenge for European supervisors is to explain to the industry what prudent investments are before the opposite ends up on the balance sheets.”

    Denmark, which has almost two years of experience with the approach after its early adoption in 2012, says a lack of clear guidelines invites misinterpretation as firms try to inflate returns.

  • NUP protests non-payment of pension, arrears

    NUP protests non-payment of pension, arrears

    The Nigerian Union of Pensioners, Electricity Sector, Rivers/Bayelsa Chapter, has protested against the non-payment of their arrears and pension for over nine months.

    The union insisted that the Ministry of Finance and Nigeria Electricity Liability Management Company, NELMCO Board should apologise to the families of its late union members, who died waiting to collect arrears and pension.

    The President, Rivers/Bayelsa Chapter of the union, Mr. Ufeme Tuka, who addressed newsmen, said the union was ready to take steps to ensure that the government aids the plight of the members of the union, who have been facing difficult times over the nonpayment of their entitlements.

    He also said the purpose of the peaceful protest is to bring the attention of the government to know that they have not been receiving their allowances adding that their members are suffering due to the government’s insensitivity to their plight.

    He said: “For a long time now, our gratuity and pensions are not paid as at when due by NELMCO. We are in the arrears of the forth month and they have not paid our pensioners.

    “Many of our members have died because of this problem of nonpayment of our entitlements because that is the only means in which we make ends meet in our families. We are facing so many challenges. As I talk now so many of our members have died as a result of hunger. We are calling on the government to come to aid. We are suffering so much”.

    During the protest in Port Harcourt, Rivers State, the union drew the attention of President Goodluck Jonathan to the hardship which their members are going through due to the irregular and non-payment of monthly pension since the beginning of the year.

    The union insisted that the Ministry of Finance and Nigeria Electricity Liability Management Company, NELMCO Board should apologise to the families of its late union members, who died waiting to collect arrears and pension.

  • Pension managers optimistic of sustainable growth

    THE future growth plan of IEI-Anchor Pension Managers looks promising, the Managing Director, Solomon Okoli, has said.

    He gave this assurance at the company first Annual General Meeting (AGM) in Abuja, during a session with shareholders.

    An upbeat Okoli assured shareholders that the company has overcome its teething problems and is now positioned for sustainable growth and profitability.

    The company, he said, had extended operations to 30 states, servicing over 75,000 customers and managing a couple of states’ staff pension.

    Already, shareholders of the company have voted to increase the company’s share capital from N2.222 billion to N3 billion in a move to accommodate increasing strategic partners’ interests that could help expand the business further.

    The company, within eight years grew shareholders’ funds more than eight folds from N150 million in 2005 to N1.240 billion in 2013, stressing that expansion efforts so far have repositioned the company for better performance even as the half year results have shown.

    The chief executive said the long- term plan of the company is to be among tier one PFAs inNigeria, with the threshold of a minimum of N100billion of assets under management.

    He explained that the cost of expansion had eaten into firm’s revenue and consequently, profit and was confident of the company’s outlook.

    “Our expansion may not be profitable immediately, but as we scale up over time, we will get through this and we are already seeing this in 2014. We are already seeing a lot of improvements.

    “We are seeing some of the locations that we opened last year being more profitable now. We are expanding our customer base, and the contribution level is beginning to yield and adding to the bottom line,” Okoli said.

    According to him, part of the expansion strategies is to raise the company’s share capital to N3 billion to be positioned for possible acquisition moves.

    “People outside are beginning to see the opportunities out there and they are getting interested in what we are doing and want to come in to be part of us. If we do not increase our share capital, cannot accommodate such people to be part of the company. So we want to have the flexibility and use the capital to expand the business,” he said of the company’s new share capital.

    “The other thing is to give room for the strategic acquisition. For some of the acquisitions, it is not everybody that want to partner with you can just take cash and walk away. They may also want to part of the owners, therefore, they need that room to also give them a stake.

    “The other thing is that if Pension Commission requires PFAs to increase capital, we have the flexibility to adapt faster than those that will start the process when it happens, so we want to be prepared.

    “Finally, for our employees, we want to give some of them a sense of ownership as part of our reward system, which includes the option to be part of the company,” Okoli added.

    Chairman of the company, Silas Jonathan Zwingina, said despite decline in revenue in 2013, a modest profit after tax of N12.8 million was recorded, however lower than the N54 million in 2012, assuring that the company was on track for third consecutive year of profitability.

    Asset under management, he disclosed, rose by 30.27 per cent in 2012 to N26.2 billion from 2011 records and also 23.22 per cent in 2013 to N32.3 billion.

    The company’s customer base also increased to 63,574 in 2013 from 53,161 in 2012 and 45,136 in 2011.

    “We continue to deliver above industry average return on investment for our account holders and providing a conducive environment for our employees to advance their careers. We are committed to profitable growth without losing sight of our responsibility to our customers,” Zwingina stated.

    He assured that the company’s board remains “reasonably optimistic” about the prospects for the company and the Nigeria’s pension industry and is determined to take bold steps to realise the aspirations of stakeholders in the coming years.

    Despite prospects, the chairman however observed that the lingering security challenges, especially in the Northeastern region limits access to that market, as cost of regulatory compliance continues to rise, limiting options for investments.

     

     

     

     

     

     

  • IEI-Anchor Pension raises share capital to N3b

    IEI-Anchor Pension raises share capital to N3b

    Shareholders of IEI-Anchor Pension Managers have voted to raise the company’s share capital from N2.222 billion to N3 billion in a move to accommodate increasing strategic partners’ interests that could help expand the business further.

    Its Managing Director, Solomon Okoli told shareholders that the  the ‘storm is over’, assuring that the firm has overcome its teething problems and is now positioned for sustainable growth and profitability.

    Okoli who spoke at the firm’s maiden annual general meeting (AGM) in Abuja that the firm has extended operations to 30 states of the federation, servicing over 75,000 customers and managing a couple of states’ staff pension.

    He said the firm grew shareholders’ funds more than eight folds from N150 million in 2005 to N1.240 billion last year, stressing that expansion efforts so far have repositioned the company for better performance even as the half year results have shown.

    The CEO said the long term plan of the company is to be among tier one PFAs in Nigeria, with the threshold of a minimum of N100billion of assets under its management.

    He explained that the cost of expansion had eaten into the firm’s revenue and consequently, profit assuring however of its bright future outlook.

    He said: “Our expansion may not be profitable immediately, but as we scale up over time, we will get through this and we are already seeing this in 2014. We are already seeing a lot of improvements.

    “We are seeing some of the locations that we opened last year being more profitable now. We are expanding our customer base, and the contribution level is beginning to yield and adding to the bottom line.”

    According to him, part of the expansion strategies is to raise the company’s share capital to N3 billion in order to be positioned for possible acquisition moves.

    Of its new share capital, Okoli said: “People outside are beginning to see the opportunities out there and they are getting interested in what we are doing and want to come in to be part of us. If we do not increase our share capital, cannot accommodate such people to be part of the company. So we want to have the flexibility and use the capital to expand the business.

  • Trustfund educates desk officers on best pension practices

    Trustfund educates desk officers on best pension practices

    Trustfund Pensions Plc has organised an interactive session for private and public organisations’ Pension Desk Officers on the implementation of best practices in deduction and remittances of workers’ pension contributions.

    The session, a collaborative one with Trustfund and Zenith Pensions Custodian Limited, held in Abuja. It was attended by desk officers drawn from all states of the northcentral geopolitical zone.

    Trustfund Pensions Chief Compliance Officer, Rachael Obi, who anchored the event, said it became necessary because of the prevailing “knowledge gap” between operators and employers remitting contributions on a monthly basis.

    Obi said mistakes made at the point of depositing contributors’ funds in the banks, meant that such contributors may face challenges upon retirement when they want to access their savings.

    “We want a situation where  we can reconcile our accounts everyday. We want to be able to operate like the banks in this regard. That is what prompted us to bring our desk officers,” she said.

    She added that the interaction was to create an avenue for the sensitisation of employers on modalities for remittance of contributions and other pension issues affecting individual contributions.

    “It will also educate employers on their regulatory responsibilities in accordance with the Pension Reforms Act of 2014 and to minimise the growth of un-reconciled contributions and transitional contributory funds,” she said.