PenCom Works on Modalities for Use of RSA to Provide Homes for Contributors

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Ebere Nwoji

The Director General, National Pension Commission (PenCom), Chinelo Anohu-Amazu, has said that the commission is currently working on modalities to provide homes for contributors into the Contributory Pension Scheme (CPS) through their Retirement Savings Account( RSA).

Anohu- Amazu, who stated this at the just conclude World Pension Summit held in Abuja, said the government, through PenCom and other related agencies are looking at modalities for using pension fund to provide mortgages for contributors into the CPS.

The PenCom Director General, said this has become necessary because at the present level of economic development in Nigeria and other sub-regional countries, there is need for diversification of pension funds to include investments in identifiable infrastructures especially in real estate and other aspects of real economy.

Speaking in an interview with journalists at the summit, Anohu – Amazu said “at this level of our economic development, the role of pension and social security systems should transcend the payment of retirement benefits, to eradicating old age poverty, creation of employment and stimulating growth of local economies.”

She added: “Today, pension and social security systems serve as catalysts for generating pool of long term investible funds that could be used to develop necessary ingredients for economic development such as infrastructure.

Given the current global economic challenges occasioned by the drop in commodity prices, the funds generated under viable pension schemes have become veritable sources of financial intermediation in the efforts being made to diversify these economies towards economic growth”.

She said currently, in Nigeria in particular, discussions are going on between PenCom and the Ministry of Finance, Ministry of Works and state governments on how the commission can channel pension funds to provision of homes for contributing Nigerians who are in need of their own houses.

She expressed the belief that this will go a long way to reduce corruption and other unwholesome behaviours exhibited by Nigerians especially public servants while in service.
The PenCom GD observed that the fear of retirement without tangible asset at hand as well as fear of how to continue in life without basic needs of life like house of one’s own is one of the factors that push many Nigerians into dubious behaviors during service.

She said PenCom, in collaboration with other relevant government agencies are working on modalities to address this, explaining that the commission wants to channel its efforts in this regard through state governments.
She however said this has spelt the need for state governments to key into the contributory Pension scheme.

“Once you have a roof over your head, your worry will be less. That is why we went into the huge reform in 2014. Because the 2004 did not allow any sort of synergy between your pension savings account and owning a home. Now it exists, what we are looking for is the modalities, What we are looking out now is modalities to make sure that pension funds are protected. We didn’t want a situation where there will be an interplay between the developers, mortgage companies and your RSA account and tomorrow you don’t get a house that is lasting, the roofing will be falling over your head after storm we are looking for guidelines to make it happen”, she said.

She said PenCom decided to channel the pension fund housing initiative through state governments because it will be less cumbersome and easier than doing it at federal level.
“The state governments are key in the drive, PenCom is already talking with them because they have lands, they want houses for their workers I believe their participation will make it faster”, she stated .

Speaking in a brief chat with journalists, president of Pension Fund Operators Association of Nigeria (PenOp), Eguarekhide Longe, said the PenCom housing initiative for contributors is achievable but that it is not something that the pension operators will achieve alone without government.

“Government has to be involved; we are hoping the land will be contributed by government for the housing scheme. Land is very critical, it requires domestication of building skills, it requires discussing and dialogue with government and is already in the pipeline”, he stated