By Solomon Asuquo
ABUJA â€” Operations of the new pension scheme became clearer yesterday with the releases of the guidelines on annuity business in Nigeria by the National Insurance Commission (NAICOM) in collaboration with the National Pension Commission (PenCom).
Speaking at a joint press conference in Abuja, the Commissioner for insurance, Mr. Fola Daniel said the guidelines wereÂ in compliance with the provisions of the Pensions Reforms Act 2004.
According to him, payment of retirement benefits must be either through Life Annuity obtained from a life insurance company, licensed by the NAICOM or Programmed withdrawal obtainable from Pension Fund Administrators (PFAs) which are regulated by the PenCom.
The NAICOM boss said that the guidelines were produced by a joint committee comprising members from both NAICOM and PenCom to achieve an effective implementation of the provision of Section 4.1 (B) of the Act.
Mr. Daniel explained that with the guidelines all operators in the industry have been provided clear working tools and must therefore live up to expectations by playing according to the rules.
He said theÂ Pensions Reforms Act 2004 was a response by the federal government to the pains retirees had been subjected to in the past and that the commission would not condone sharp practices by any stakeholder.
â€œFollowing the release of the regulation, life insurance companies are expected to rise to the challenges of providing new products and or modifying the existing products to align with the economic realities and value added needs of retirees.
â€œIt is only through this that they can be competitive and remain relevant in the current dispensation.
Life insurance companies are reminded that expansion in the branch network, efficient deployment of information and communication technology and prompt payment of benefits will provide the competitive advantage for the operators.
â€œWhilst the Commissionâ€™s repositioning for virile and responsive industry supervision and regulation is continuing, it is my expectation that excellent service will be the watchword of operators through compliance with good ethics and norms, thus making enforcement of rules a distant necessityâ€.
In his remarks, the Director-General of the PenCom, Mr. Mohammed K. Ahmad, saidÂ that any stakeholder found to be undermining the regulation would be heavily sanctioned by his organization.
According to him, â€œwe expect the highest standard of corporate governance. We expect that each participant will comply with those specific corporate governance issues. Therefore, we expect very transparent, open and fair competition.
â€œIf there is any person or any entity that believes that it can take advantage of this system, let them think twice. We will go to any extent to protect the employee. That we cannot compromise. If somebody believes that it can take money from retiree and perhaps defaults when the time comes to pay, we are going to take necessary action.
â€œAs the commissioner for insurance has said, we will also collaborate to ensure that no entity, no matter how powerful and no matter how strong will be punished if found to have defaulted. As a regulator, our responsibility is to ensure that every participant plays the game according to the rules that governs the game.
He stressed that the Pension Act made it mandatory for both public and private sector employers participate in the contributory pension scheme from which payment of retirement benefits could be made to their employees when they retire.