PenCom realises 5.9tr from 7.2m contributors in 12 years
Targets 20 million contributors by 2019
The National Pension Commission (PenCom), said it realised over N5.9 trillion from 7.2 million contributors since it commenced operation 12 years ago.
This comes as the commission said it is targeting to increase the number of contributors to the scheme by up to 20 million over the next five years.
However, there are speculations that the value of the Pension Fund might be much lower than currently quoted, following the mass sacking of workers in both the public and private sectors in recent time. This is because many contributors were said to have taken out the statutory 25 per cent of their total contribution, upon the loss of their job.
Speaking at the PenCom Workshop for Finance, Insurance, Labour Correspondents and Business Editors at Calabar, the PenCom Director General, Mrs. Chinelo Anohu-Amazu; said the relative success of the implementation of the Pension Reform Act (PRA) 2004, could largely be attributed to the fundamental structures upon which the Contributory Pension Scheme (CPS), was built.
She said: “The enactment of the PRA 2014 served as the basis for the implementation of our new Corporate Strategy Plan. Expanding the coverage of the CPS to the underserved economic sectors through our Micro Pension initiative is a key priority of our strategic vision.
As we seek to increase registered pension contributors to at least 20 million by the year 2019, informal sector participation through the Micro Pension Plan is expected to provide impetus.”
To this end, she explained that the Commission has also enhanced its support to the states in facilitating their adoption and implementation of the CPS by providing a bespoke technical assistance, through our State Operations Department and Zonal Offices in each of the six geo-political Zones.
According to her, the cardinal principle of separation of custody from management and supervision of pension funds has resulted in a pension scheme with sound internal mechanism for transparency and accountability.
She said that whereas the Pension Fund Administrators (PFAs) manage the pension funds, they do not have access to same, since custody is vested in the Pension Fund Custodians (PFCs), while the Commission ensures both parties adhere strictly to regulations governing the pension funds.
She said some of the major success indicators include the consistent growth in a large pool of pension assets of over N5.9 trillion, which are invested in structured and safe financial instruments for the 7.2 million pension contributors; 170,000 retirees under the CPS.
The PENCOM boss, who was represented by the Commissioner, Inspectorate Division, Mohammed Abubakar Ka’oje, said the Commission aims at increasing the level of awareness on the Contributory Pension Scheme (CPS) and other related pension issues.
She said: “The enactment of the Pension Reform Act (PRA) 2004 was a significant turning point in the quest to bequeath a sustainable and efficient pension system for Nigeria. The main aim was to provide an enduring solution to the protracted challenges associated with pensions in both the public and private sectors. The main highlights of the PRA 2004, included the introduction of the CPS to replace the old Defined Benefits Scheme and the establishment of PenCom.
“However, these modest milestones notwithstanding, the implementation of the PRA 2004 was not bereft of challenges. Indeed, some issues were noted in the course of implementation since the PRA 2004 and this underscored the imperative for a comprehensive review of the PRA in order to consolidate on the Pension Reform. The re-enactment of the PRA in July 2014 provided a sound basis to guide the second decade of the Nigerian Pension Reform.
“The PRA 2014 sought to ensure that more tangible benefits accrue to retirees towards a more blissful retirement. Some of the major developments introduced by the new law include an increase in monthly pension contributions to 18 per cent from the previous 15 per cent, in order to ensure that retirement benefits are enhanced under the CPS for the benefit of contributors; reduction in the waiting period for contributors to access their Retirement Savings Account (RSA) in the event of temporary loss of job from six months to 4 months; stiffer penalties and sanctions for infractions; establishment of the Pension Transitional Arrangements Directorate (PTAD) to co-ordinate the smooth administration of the old DB Scheme of the public service; amongst others.