- Decries cut in retirees’ entitlement by N’Assembly
By Ebere Nwoji
The National Pension Commission (PenCom) has said it is putting in place measures that will significantly raise the contribution of pension funds to the country’s Gross Domestic Product (GDP) from five per cent presently, to about 10 per cent by next year.
The Acting Director General of the National Pension Commission (PenCom), Mrs. Aisha Dahiru-Umar, who said this in an interview, also pointed out that the cut of over N3 billion from the amount budgeted to offset backlog of pension benefits to retirees by the National Assembly was affecting the payment of accrued benefits to retirees from Ministries, Departments and Agencies (MDAs).
The payment was for accrued benefits of the retirees in the MDAs.
According to her, accrued rights was that part of the pension benefits due to employees prior to the introduction of the CPS.
She reiterated that the CPS had facilitated a pool of pension funds, which presently stood at N8.3 trillion as at June 2018.
“As you have rightly noted, there are enormous potential for growth of Nigerian pension funds to account for a significant proportion of the GDP.
“Indeed, the commission’s ongoing strategy implementation aims at attaining an increase in the ratio of pension funds to GDP to at least 10 per cent by 2019,” Dahiru-Umar said.
According to her, some of the measures being put in place to achieve the target include firstly, the expansion of coverage of the CPS to the underserved economic sectors through micro pension and renewed enforcement of compliance.
Dahiru-Umar explained, “Our objective in this direction is to attain at least 20 million contributors by the year 2019. Secondly, we seek to grow the assets through more investments in variable income instruments that generate higher returns.
“In order to achieve this, we have commenced implementation of the multi-fund structure in July 2018, which segregates the funds based on the risk profile of contributors and gives them an opportunity to choose subject to age parameters.
“Furthermore, the increase in contribution rates in the Pension Reform Act 2014, from a total of 15 per cent, to 18 per cent, comprising 10 per cent by employer and eight per cent by the employee, would also increase the size of pension funds when fully implemented for treasury funded federal government’s MDAs.”
In addition, she said the commission has also intensified efforts at ensuring the payment of all outstanding pension liabilities, including accrued pension rights, and pension increases that were yet to be implemented.
According to her, “The industry is already leveraging on information technology to deliver better services to the contributors and retirees. The Pension Fund Administrators have been expanding their branch networks in order to ease customer interface, while the Commission has been operating its zonal offices in each of the six geo-political zones of the country.
“We are also intensifying efforts at ensuring the adoption and implementation of the CPS by all the states in the federation. Other measures include a wider public enlightenment and education of the CPS in order to attract a wider participation.”
Meanwhile, Dahiru-Umar stressed that the cut of over N3 billion that was in the 2018 Appropriation Bill prior to its assent by the president would affect the payment of retirees’ benefits.
She explained, “As at today, there is outstanding arrears for retirees from May, 2017. The commission would continue to engage all the relevant stakeholders such as the National Assembly, the Presidency, Budget Office as well as the Federal Ministry of Finance to ensure that all the accrued rights and other pension liabilities are paid.
“We are also aware that efforts are being made to accommodate the outstanding liability in the supplementary budget so as to bring succour to teeming federal government’s retirees who are currently waiting for the payment of their retirement benefits.”
She said the outstanding amount for federal government employees had been communicated to the government and in previous times, what was appropriated, it was short of the amount advised.
“This is one of the reasons for the delay. But we are confident that money will be released to defray this liability. Last year, N54 billion was released when there was some intervention by the federal government.
“My appeal is for retirees to bear with us. These are liabilities from the government and government is trying. As mentioned earlier, we are engaging all the relevant stakeholders.
“Government has the will and it has been shown by the release of the N54 billion. Definitely, we are hopeful that as we mount pressure and there is good intention as already demonstrated, this liability will be cleared soon,” the PenCom boss said.
Pension fund provision was among the N347 billion cut made by the National Assembly from the initial N8.612 trillion appropriation bill presented by President Muhammadu Buhari to the lawmakers.