By VICTOR AHIUMA-YOUNG
THE Contributory Pension Scheme, CPS, has raked in a total of 16 billion US Dollars since kick-off in 2004, the Director-General of National Pension Commission, PenCom, Mr. Mohammed Ahmad, has announced.
Mr. Ahamd who spoke at the meeting of the Migrant Workers’ Working Group of the International Social Security Association, in Abuja, Nigeria, said this is equivalent to N2.6 Trillion.
The Director-General who explained that the meeting provided provide an opportunity for the participants to discuss issues on the protection and portability of retirement benefits of Migrant Workers within and across the West African Sub-Region, noted that the two-day meeting would not have come at a better time.
According to him, “the issues on retirement benefits of migrant workers than amidst the rising number of migrant workers due to the various bilateral and multilateral agreements on the movement of people, goods and services across countries.
The West-Africa Sub-Region has witnessed an annual average growth rate of 1.8 percent in the number of migrant workers between 2005 and 2010, which proportionally represented 2.8 percent of the total population of the Sub-Region.
Thus, this meeting should focus in identifying ways that would ensure the provision of retirement benefits for every migrant worker in the Sub-Region, facilitate the transfer of these benefits as and when due and provide adequate protection to the pension assets of this class of workers.
“It will be recalled that Nigeria introduced the Contributory Pension Scheme, CPS, in 2004 that allowed employees of both the public and private sectors to open Retirement Savings Accounts, RSA, in which they accumulate assets for payment of pension after they retire from their various employments.
This system made it possible to isolate the pension assets of every registered contributor right from inception. Retirees have the option of procuring Programmed Withdrawal or purchasing Life Annuity as a way of accessing their retirement benefits from their RSAs. However, migrant workers are allowed to transfer the full content of their RSAs to their countries of choice on retirement.”
Mr. Ahmad said it is well known to us that many pension schemes are not as flexible, meaning “portability of the retirement benefits of the affected employees may not be possible. Indeed in some cases, the workers are employed as contract staff with contract salaries that are slightly higher than the benefits of the employees that could benefit from some form of pension arrangements.
The former employees are not entitled to any retirement benefits. This bias has since been corrected in Nigeria by the introduction of the CPS, which allows every employee to register an RSA and have his/her retirement benefits remitted on monthly basis. This step taken by Nigeria solved not only the above problems and other logistics associated with retirement benefits, but also generated a pool of log term funds for economic development.”
“So far, about N2.6 trillion, equivalent to over $16 billion has been generated under the Scheme and had been invested in various sectors of the economy. The Scheme had created institutional investors and generated direct employment as well as provided business opportunities to third party service providers.
Our approach had already been studied by some sister African countries such as Ghana, Malawi and Tanzania in order to understand the systems and procedures with a view to fully implementing same or part thereof for their countries.”