OVER two Million members of the National Union of Road Transport Workers, NURTW, have keyed-into the Contributory Pension Scheme, CPS, which is a fall-out of the Pension Reform Act, PRA, 2004.
At the flag-off of registration of Retirement Savings Account, RSA, exercise for members of the NURTW, in Kaduna, Director-General of the National Pension Commission, PENCOM, Alhaji Mohammed Kabir Ahmed, said there was no longer doubt about the viability of the scheme because it has assets of about of N1.9 trillion with about 4.5 million people registered.
He reiterated that the commission pays about N100 million monthly to contributors who have retired from their various services, saying; “Today, we have launched a scheme for the road transport workers and their membership is about 2 million and if you assume that that number is going to register, obviously, you are looking at a figure of about 8-10 million.. That is confidence in the industry and to that extent; we believe that progressively, the industry has been growing at a much faster rate perhaps than in any other country. We have consistently informed Nigerians that this is a scheme that emphasizes safety of pensioners and we have, both in our conduct and in terms of our regulations to ensure that whatever anybody contributes, he gets his money as and when due. In terms of that, we identified some key issues in terms of safety because safety is an important issue for us and I can assure you that as at today, we have over 30, 000 Nigerians that have retired under the new scheme and are getting their benefits as and when due. We had the melt down in the capital market between 2007 and 2008. If you closely watch the development in the capital market, we have gone beyond that. Pension assets are long time investment and that means it goes on for a long period, even though there was fall in terms of values of shares, the pension industry has not suffered that much because substantial part of the pension assets was not invested in the capital market.”
“Secondly, as long time investors, most pension fund administrators have not sold off their investment and so has not realize their unrealized losses. But beyond that today, the capital market is coming back and you will notice that share prices have been going up. It is essentially a matter of time and to that extent, we are not so much bothered. We have gone beyond just having a single fund and are going to have what we called a multiple fund. What that means is that you can decide to keep your money in any of the funds. For example, if you are much older person, you will not be asked to keep money in what we called floating rate and you money is likely to be in fixed rate essentially because this is an evolving system and we want to start from the basis and very soon, contributors will have choice as to where their funds will be invested. In terms of compliance, what we have done so far is to introduce what we call voluntary compliance, using moral persuasion. We have indeed sanctioned a number of contributors and have published names of employers that have defaulted. Since last year, we have started the process of taking legal action against defaulting employers.
“The significance of today’s event is that we are having self employed Nigerians joining the system. The law says if you are an employer and you have five employees and above, you are expected to join the scheme. Here we are today, having individuals joining the scheme. This is the first time under this new scheme that we are having about 2 million Nigerians who said they will join the scheme. The benefit for them is that they are saving for their retirement. In this country, we have people who have worked for 20 to 30 years and at the end of the day, they have nothing. “Beyond that, the scheme has what you call a minimum pension guarantee. The details are yet to be worked out, but it says that if you contribute for a specific period of time, when you are retiring, even if you pension has not reached the minimum pension guarantee, you will be paid a minimum pension.”