We want Pension to play more active role in Nigeria’s economic growth—PenCom

on   /   in Labour 12:49 am   /   Comments

Between Monday July 6 and Tuesday, 7, Nigeria, through the National Pension Commission, hosted the World Pension Summit, WPS, the only platform ‘for and by’ Pension Professionals, exchanging knowledge and innovative ideas on how to secure sufficient pension provisions.

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It is an annual gathering of over 400 professionals from 40 countries coming together to exchange expertise and best practices to further essential development in social security, innovation and pensions. The WPS was founded in 2010 with its inaugural and all other successive editions holding in The Netherlands.

In this interview, the Acting Director-General of PenCom, Chinelo Anohu-Amazu, speaks on WPS among others. Excerpts:

Why is PenCom important and how safe are contributed pensions?

Our conservative and modest philosophy may not permit me to say how important PenCom is. However, by the time we look at the numbers in terms of where we were before the reform and our position today, you should arrive at the answer.

First of all, the CPS has engendered a regime of a fully-funded pension scheme with assets in excess of N4 trillion today. This has been a remarkable growth when compared to estimated pension liabilities of over N2trillion before the reform.

Over 98,000 workers have retired so far and are receiving their retirement benefits as and when due without any hassles. In the past, they joined long queues and some even died in the process. In terms of safety, the pension fund assets are ring fenced.

That is, there is a separation between management and custody. While the Pension Fund Administrator, PFA, manages the assets, the Pension Fund Custodian, PFC, maintains actual custody of the funds and these functions and the investment of the funds are all guided by the Investment Regulations issued by PenCom. The pension assets are only invested in safe and secure instruments.

The commission monitors this daily by requiring PFAs to submit daily valuation reports which are reviewed to ensure compliance. These are the things that speak to the importance of PenCom.

You have been involved with PenCom from the reform stage, passing of the law, being legal adviser and now acting D-G. How has the journey been and what lessons have been learnt?

The journey has been very challenging but rewarding when one looks at the successes recorded. Concerned by the magnitude of issues and lack of transparency in pensions in Nigeria, then, former President, Chief Olusegun Obasanjo constituted a Pension Reform Committee chaired by Mr. Fola Adeola. I served on that committee. It was the committee’s work that culminated into the PRA 2004. At the time, there was a lot of apprehension on the part of stakeholders, (organized) labour for example.

Their concerns were understandable, considering some not so pleasant outcomes of other reforms by government in the past. Ten years now, I am glad that having seen PenCom’s steadfastness in protecting the interest of retirees, labour is one of our greatest supporters. We have tried to continue sustaining the reform by being proactive.

That is why we embarked on a major review of the PRA 2004 in order to strengthen the reform by expanding its coverage and enhancing benefits to retirees. We are pleased that both chambers of the National Assembly have passed the bill. One of our strategic focus areas is to bring on board the informal sector of the economy where most of our active employees earn their living. However, the rules would be tailor-made to suit their peculiarities.

Why the WPS Africa Special, and why now? Who is driving this and is the local industry on board?

The WPS is the largest annual gathering of pensions professionals worldwide where issues on how to advance the provision of pensions are discussed. The WPS Organization is based in Amsterdam, the Netherlands where its annual summits take place and they have welcomed well over 1,000 senior pension professionals from three continents across the globe since inception.

The partnership between WPS and PenCom to bring that wealth of experience to Africa is perhaps an indication of the confidence being reposed in PenCom over the successes of the pension reform in Nigeria. For the commission, the summit is aimed at providing a platform to find solutions to some of our pressing challenges in moving our industry to the next level.

Major issues include discussions around Pension funds investments in infrastructure and real estate, enhancing contributor satisfaction through technological innovation, risk management and social security, amongst others. We also want to share these learning experiences with other African countries. That’s why invitations were extended to all African countries, with speakers attracted from global thought leaders with diverse expertise.

What is the vision of your team for PenCom, (i.e. double coverage, focus on pensions for infrastructure development, enabling more sustainable and deep investments etc.?

Our vision is to sustain and improve on the reform by ensuring that retirees are more comfortable at retirement. We also seek to expand coverage by bringing the informal sector to come on board. We seek to get pension funds to play a more active role in the economic development of the nation by, for instance assisting in solving the huge infrastructure gaps in terms of roads, power supply, housing, etc. However, we must emphasize that any investments that pension funds partake in must be through safe investment vehicles.

What does the future hold for PenCom and the industry and what is your message for Nigerians?

The future appears bright indeed and quiet challenging. PenCom has a social responsibility to discharge. The Nigerian worker must derive the benefits of belonging to the CPS; and the country as a whole must be significantly impacted by the effective deployment of pension assets. This is the challenge for us at PenCom and we must focus to deliver on it.

l Culled from PenCom press kit

 

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