A Troubled Pension Commission

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By Kunle Aderinokun

A sustainable retirement pension system is regarded as a key enabler of national development. It is an indication of how foresighted a society is and its preparedness to take care of its older population, without burdening the active, working generation.

Supposedly, that was what Nigeria set out to achieve through her Contributory Pension System that is regulated by the National Pension Commission (PenCom).

Unfortunately, the governing board of PenCom was summarily dissolved in April 2017, and the regulatory Agency has since that point been left without any clear leadership and direction.

After months of speculation and weeks after a list had been circulating across all social media platforms that the Presidency forwarded the following names to the Senate for confirmation as members of the Governing Board of PenCom: Dr. Oyindamola Oluremi Ore (NC) – Chairman, Aisha Dahiru-Umar (NE) – DG/CEO, Hannatu Hanney Musa Musawa (NW) – Executive Commissioner (Administration), Clement Oyedele Akintola (SW) – Executive Commissioner (Inspectorate), Ayim C. Nyerere (SE), Executive Commissioner (Technical), and Charles Efe Sylvester Emikowhate (SS) – Executive Commissioner (Finance). The list has generally been condemned and has been described as a clear expression of blatant nepotism and apparent incompetence.

Instructively, the South-east Caucus of the Senate, led by the Senate Minority Leader, Senator Eyinaya Abaribe, has denounced the composition of the new board, arguing that it is in breach of the Federal Character Principle. Indeed, for most stakeholders, the composition of the new board is most odious because the government has jettisoned competence in favour of ethnic sentiments.

Since the sudden dissolution of the board of the commission in 2017 and the subsequent appointment of Dahiru-Umar in acting capacity in April 2017, industry watchers and stakeholders have understandably become divided fiercely along the lines of ethnicity, competence, and the overall security of the pension industry. No less fierce is the babel growing outside the industry.

While a few are driven by genuine concern for the long-term sustainability of pension funds, a good many others, it must be recognised, are interlopers barely able to conceal dark motives that are either pecuniary or hegemonic.

Those angling for the confirmation of Dahiru-Umar, for instance, conveniently do not recall that she hails from the same North-east Geo-Political Zone that produced the pioneer Director-General/CEO of the Commission, Mr. Muhammed.K. Ahmad, who spent eight years in the saddle.

When one considers that Dahiru-Umar has spent over three years in acting capacity and would spend another five years, in the event that she is confirmed by the Senate, it means that the North-east would have, in clear violation of the Federal Character Principle, superintended over the commission for 16 out of its 20 year existence.

Beyond the issue of federal character and its contingent breach, as aforementioned, is the more profound issue of competence, regulatory craft and the threat to the security of pension fund assets that the nomination of Dahiru -Umar poses for the existential survival of the pension industry.

Had she demonstrated the requisite regulatory pedigree while serving in acting capacity, it would have been easy to downplay the geo-political and ethnic imbalance that her nomination throws up.

Unfortunately, her antecedents over the last three years call for caution and rethink of her nomination for confirmation, as the nation must put the safety of an N11trillion pension industry over and above primordial sentiments.

It is simply impossible for one to stay neutral in the face of a brewing crisis in the industry, lest one shirks his civic and professional duty.

Consequently, mindful of Nigeria’s chequered past in the administration of pension funds and retirement benefits, conversant with the promises made by forebears at the start of the pension reform journey in 2004, consistent with one’s progressive values and desirous of a secure pension industry, one wishes to sound a note of warning to the current administration about the dangers posed by the nomination of Aisha Dahiru-Umar, as director general of the National Pension Commission.

Her activities, actions and inactions over the last three years as acting director -general has been a source of concern for stakeholders, as she has demonstrated a lack of understanding of the basic tenets of prudential regulation and the imperative of preserving the sanctity of pension fund assets.

From failure to implement the cutting-edge Pension Administration System (PAS) that had been approved by the Federal Executive Council prior to her assumption of office, to her sub-par launch of the now moribund micro pension scheme, to her inability to effectively engage with the Pension Fund Administrators and Custodians, she has clearly failed to rise to the occasion, a situation that has caused grave apprehension within and outside the industry.

Unfortunately for Dahiru-Umar, whereas a convincing argument can be made by stakeholders who are clamouring for the appointment of a consummate professional to run the affairs of the Commission, no defence can be sustained for her, as the incumbent, as the past three years offered a platform to interrogate her ideas, measure her strength and test her character.
The general consensus amongst stakeholders – even within her caucus of advisers – is that she had been an unmitigated disaster. Otherwise, Dahiru-Umar can be challenged to point to her achievements and defend them.

While it is true that vision is key to transformational leadership, no less critical is the latitude to share the vision, and the sagacity to agglomerate a critical mass of stakeholders with a view to making the sustainable. In the context of regulatory craft, especially for an N11 trillion pension industry where fiduciary responsibility is paramount, persuasion is certainly more potent and profitable than brute force and quasi-dictatorship. Increasingly, Dahiru-Umar has created the impression that the Africa’s foremost pension industry is currently at the mercy of an ill-prepared, functionally inexperienced and essentially doltish regulator.

With the gale of appointments being made by the current administration, most industry watchers have hoped that a more qualified professional would be appointed to run the commission.

In sum, the current attempt to extend Dahiru-Umar’s reign at PenCom, while simultaneously violating the principles of federal character is a direct affront on the sensibilities of pension fund contributors and an assault of the sanctity of the industry.

One hopes that the executive quickly withdraws the current nomination and in the event that they don’t, the National Assembly must as a matter of national imperative reject the nomination.

All things considered, if there is anything the generality of Nigerians are now agreed on, it is aversion to the culture of nepotism and institutionalising of incompetence in public service.

Unlike Dahiru-Umar, part of the challenge before a new commission that would respect federal character and prioritise competence will, therefore, be drawing up a comprehensive regulatory agenda that would, among other things, ensure that pension fund assets are strategically unlocked to finance critical, high-yield pro-development infrastructure projects in the country. Indeed, in order to promote shared prosperity and engender inclusive growth, Nigeria needs to effectively regulate the pension industry and as such, a competent and trustworthy director-general and governing board must be put in place by the executive arm of government.