Wednesday, June 16, 2021

    Nigeria’s pension assets rise to N7.779tr

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    Babatunde Akinsola
    Babatunde Akinsola is aNaija247news' Southwest editor. He's based in Lagos and writes on the Yoruba Nation political issues, news and investigative reports

    Nigeria’s net pension assets value of the contributory pension fund has hit N7.779 trillion as at February 28, 2018.

    Also, contributors have grown by 390,000 as it increased from 7.50 million as at March 31, 2017 to 7.89 million as at December 31, 2017 and then to 7.90 million as at February 28, 2018.

    Acting Director-General, National Pension Commission (PenCom), Mrs Aisha Dahir Umar disclose this in her welcome address yesterday at the just concluded workshop organised for reporters in Uyo, Akwa Ibom State.

    Represented by the Commission’s Secretary and Legal Adviser , Mohammed Sanni, she said the growth represents an increase of N270 billion up from the value of N7.52 trillion as at December 31 last year.

    She attributed the increase to new contributions received, interest/coupon from fixed income securities and net realised/unrealised gains on equities and mutual fund investments.

    The Acting DG said efforts are in top gear to settle at outstanding pension liabilities of the Federal Government.

    She explained that the Commission served as a member of an Inter-Ministerial Committee that was set up by Mr. President to determine the total pension liabilities of the Federal Government under both the CPS and the Defined Benefits Scheme, and advise the government on the amount required to be provided in the budget to defray the pension obligation. The Committe was chaired by Finance Minister, Mrs Kemi Adeosun.

    She said the Commission has determined the total pension liability owed to the Contributory Pension retirees due to both the 15 per cent and 33 per cent pension increases of 2007 and 2014 respectively.

    In addition, she said the outstanding accrued rights of Federal Government employees that retired last year as well as the amount due to those retiring this year, have been submitted to the Federal Government for appropriation in budget 2018.

    Based on the positive disposition of the Federal Government towards settling outstanding pension liabilities, as evidenced by the release of N54 billion in April last year, it is expected that these liabilities will soon be cleared, she noted.

    She also said the Commission is intensifying efforts at ensuring the provision of necessary infrastructure for the launch of the Micro Pension Scheme in line with the Commission’s strategic objective of expanding coverage of the CPS to the under-served sectors. She described micro pension as a major part of the strategy for expanding coverage of the Contributory Pension Scheme.

    She said the guidelines for the schem are being finalised preparatory to the commencement of the scheme.

    Speaking on the enhancement of monthly pension of retirees under the Programmed Withdrawal, she said the Commission initiated the Pension Enhancement Programme following the discovery that the returns being generated by the Pension Fund Administrators (PFAs) on the balances of Retirement Savings Account (RSAs) of majority of retirees could be used to enhance their monthly pensions.

    She said: “Consequently, the Commission sought for and obtained the approval of the Secretary to the Government of the Federation to implement the pension enhancement, which resulted in increased monthly pensions for most retirees receiving pension under the Programmed Withdrawal arrangement.

    “Accordingly, the PFAs have commenced the enhancement of pensions of all retirees under Programmed Withdrawal with effect from December 2017. The implementation of the pension enhancement is one of the significant milestones attained since the commencement of the CPS. It confirms that the CPS has workable internal mechanisms to respond to legitimate demands of retirees as they seek a reasonable retirement income. The Commission intends to sustain this periodic review exercise in line with relevant provisions of the law.”

    On Voluntary Contributions (VC), she said the Commission issued a circular on Withdrawals from VC in November last year.

    “The circular was necessitated by the observed incidences of high rates of withdrawals from VCs by contributors, which appeared to negate the main purpose of using such contributions to augment pensions at retirement. In addition, the Commission seeks to ensure strict adherence to Anti-Money Laundering provisions and relevant taxes laws.

    “The main thrust of the circular is that 50 per cent of the VCs can be withdrawn once in every two years, while subsequent withdrawals would be on incremental contributions from the last withdrawal.

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