WorldStage Newsonline-- Pension scheme globally has continued to be used by various governments to protect the future of their citizens, especially after retirement.
The setbacks in the various Nigeria's pension schemes such as the National Provident Fund (NPF) which was established by an Act of parliament in 1961 and the Pension Act of 1979 that established the Nigeria Social Insurance Trust Fund (NSITF) led to the establishment of the Pension Reform Act 2004.
From record, total pension asset in the Nigeria rose from N815.18 billion in 2007 to N1.1 trillion in 2008, N1.5 trillion in 2009, N2 trillion in 2010, to the current N2.4 trillion.
The number of contributors in the scheme now stands at 4.9 million, of which 2.7 million are from the public sector; while 2.2 million are from the private sector as at November this year.
Speaking on the performance of the scheme in the last one year, the Director General of National Pension Commission (PenCom), Mr. Muhammad Ahmad said “in the past seven years we have ensure that we attain the planed objectives of the scheme,” adding that there were currently about 40,794 retirees from the public and private sector while 4.92million Nigerians had registered on the scheme as at November, 2011.
He said that a total of N115.6 billion was collected as lump sum at the point of retirement and N1.284 billion as monthly pension.
He explained that during the year, the commission continued with the regulatory and supervisory philosophy which is risk-based and consultative with particular emphasis on issuance of guidelines and regulations, surveillance of licensed operators.
“We intensified efforts in the on-site inspection of employers, collaboration with regulatory and professional bodies, public enlightenment campaigns and application of regimes of sanctions,” he said.
He explained that the commission was committed to ensuring strict compliance and enforcement, supervisions of investment of pension funds and maintenance of a databank on pension matters.
In ensuring compliance mechanism, he said that the commission had aggressive effort by taking legal actions against defaulting employers that were not committed to the scheme.
As part of consolidation efforts during the year, he said the commission had given Pension Fund Administrators in the country up to June 2012 to meet the deadline for the new minimum capital requirement which is N1 billion.
He added that during the year, 16 states enacted laws to embrace the contributory pension scheme and buying-in by state in implementation of the new CPS.
“Two additional states, Osun and Imo enacted the laws on CPS within this period, which brought the total number of states that enacted laws for the implementation of CPS to 16,” he said.
“Niger and Ogun Local Government Pension Bureau commenced funding of Retirement Benefits Redemption Bond Accounts with balance of N1.12 billion and N1.43 billion respectively in 2011.”
He added that as part of its interaction with state government, the commission visited Cross River States and held a technical sessions with the key officials of the states.
“Trust Fund Pension was granted no-objective direction to conduct a follow up re-validation exercise for the existing NSITF scheme pensioners, who missed the earlier exercise conducted in September and October 2009.”
He added that Trust Fund Pension was also requested to conduct a follow up exercise for a more extended period of 12 months at its eight regional offices in Lagos, Ibadan, Benin, Abuja, Port Harcourt, Maiduguri and Kano so as to ensure that adequate time was given to re-validated all pensioners under the scheme.
On challenges confronting the scheme in the public sector, Ahamd identified data integrity of personnel profile from MDAs, absence of centralized personnel database, incorrect/incomplete documentation by employees during registration and failure of MDAs to submit staff nominal roll to the commission.
Others were delay in enacting relevant laws, irregular funding of RSAs by some state government and failure to remit amount deducted as some of the challenges facing the scheme on the state level.
While the scheme in private sector is faced with the following challenges such as weak business environment, reluctance of some employers due to perceived increased personal cost, non or irregular funding of contributions, remittance without correct schedules and large informal sector.
Despite the challenges, he said that in moving forward the commission will be introducing some initiatives such as the Retirement Savings Account (RSA) transfer mechanism which would be made operational, adding that the framework was currently being reviewed by the industry.
“To provide RSA holders with choice of investments, multiple fund structures would be introduced subjects to specific guidelines by the end of the second quarter of next year. Additional disclosure requirements would be required of operators to promote further transparency and accountability in the industry.
“The risk management and analysis system which is the core supervisory application would be finalized and would greatly improve the efficiency and effectiveness of the commission,” he noted.
He however assured that the commission will ensure that the scheme is not only protected but also nurtured to sustainable and enduring system which we would be proud to bequeath to next generations yet unborn.
Stakeholders in the sector have continued to applaud the performance of the National Pension Commission (PenCom) in ensuring that the scheme succeeds in the country.
The Group Managing Director of Crystalife Insurance plc, Mrs. Oluseyi Ifaturoti who applauded the performance of the PenCom in ensuring the success of the scheme, commended the leadership of the commission, saying, “I think the management of the Scheme has done very well since inception and also this year. Before now, we hear of retirees cuing up and dying in a bid to collect their benefits but today the story has change for good.
“I know there will be some challenges, but with time, these challenges will be handled by the commission. There is no sector that does not have its challenges. So I think we should give them some time and all will be perfected.”
Mr. Dave Uduanu, Managing Director of Pension Alliance Limited and Chairman Pension Operators Forum disclosed that the industry is a viable one and the gains made so far are sustainable.
Story by Nkechi Naeche (firstname.lastname@example.org)