Employers laud pension reform as subscriber base hits 6.58m
The employers under the aegis of Nigerian Employers Consultative Association (NECA), an umbrella body for Organised Private Sector (OPS) in the country, said the scheme has guaranteed post-service benefits for Nigerian workers at retirement.
The employers who spoke at a stakeholders’ interactive forum on the National Pension Commission (PENCOM) and implementation of the Pension Reform Act 2014, held in Lagos on Tuesday, said the reforms had in the last one year brought relief both to employers and their employees on pension matters.
Executive Director at Seven Up Bottling Company, Femi Mokikan, who spoke on behalf of the employers, said the scheme could be likened to the only system that is working in Nigeria today.
PRA 2014, which repeals the pension act of 2004 beginning from July 1, 2014, has extended the contributory pension service from Federal public service to states, Local Governments, private sector with more than three employees and the self employed, all contributing a minimum of 18 per cent of a worker’s monthly emolument (10 per cent from employer while eight per cent comes from the employee).
Other features in the Act allows contributors to access 25 per cent of the benefit after four months out of job (either if dismissed or on voluntary retirement); opportunity for re-integration with new employment; group life insurance policy of three times of the annual emolument; pension fund investment income and dividends now tax exempted and Retirement Savings Account (RSA) balance to secure residential mortgage, plus more stringent punishments for asset mismanagement among other features.
Mokikan, who was represented by Philomena Azokwe, noted that section 8 (1) of the Act was helpful in case of an employee’s demise, with the entitlement now payable to the named beneficiary and no more to the RSA in the PFA.
“This is a significant relief. It is commendable, compared to section 5 (1) of PRA 2004,” he said.
Director General of NECA, who was represented by Timothy Olawale, said various stakeholders’ concerns and contributions in the past have helped in the making of the scheme now appreciated by Nigerians.
Olawale said it was important to sustain this engagement with the National Pension Commission (PENCOM) and the employers’ community to address other emerging issues.
Head, Investment Supervision Department, PENCOM, Ehimeme Ohioma, assured the stakeholders that the scheme is more secured today, running on conservative philosophy and effective monitoring and surveillance of investment.
Ohioma noted that the introduction of multi-fund structure, to address the varying appetites of contributors, will further improve on the available benefits, coupled with the need to encourage the development of more instruments by asset managers/capital market operators for pension fund investments.