PenCom Urged to Finalise Modalities for Implementing GMPS

Ebere Nwoji

An Actuarial Scientist and Managing Director, Linkage Assurance Plc, Dr. Pius Apere has urged the National Pension Commission ( PenCom) to expedite action on the modalities for implementing the Guarantee Minimum Pension (GMPS) for Nigerian workers.

The GMP is akin to an income support from the government and can be considered as a variant of social security policy that ensures redistribution of resources to its populace. It acts as a safety net for pensioners.

It is a form of underpin applicable in a defined contribution (DC) scheme, such as the Contributory Pension Scheme (CPS) currently being operated in Nigeria, which has a main benefit that is defined contribution in nature, with a promise that the benefit will be at least a defined benefit (DB) amount usually a percentage of final salary at retirement date.

Apere, noted that more than 10 years after the CPS was established in Nigeria, PenCom was yet to finalise the modalities for implementation of the scheme.
He observed that the importance attached to the welfare of retirees by government led to the provision of the GMP in the pension act, adding Nigerian pensioners, have high expectations on PenCom and federal government to timely and efficiently implement all provisions of pension regulations.
“These expectations arise from the need to have sustainable standard of living in retirement”, he stated.

According to him, under the prevailing pension regulations in Nigeria, one of the ways to achieve the pensioners’ social welfare goal, is the implementation of the GMP, as provided in section 84(1) of the Pension Reform Act (PRA) 2014 as amended, which states that “all Retirement Savings Account (RSA) holders who have contributed to licensed Pension Fund Administrators (PFAs) for a number of years to be specified by the Commission, shall be entitled to a guaranteed minimum pension, as may be specified from time to time by the Commission”.

Highlighting the implications of the failure by PenCom to implement the GMP as provided for in the Act, Apere, said the traditional thinking, has been that members in direct contribution scheme, bear all the risks and rewards and receive whatever outcomes are produced at retirement.