By Naomi Uzor
The President of the Lagos Chamber of Commerce and Industry, (LCCI) Otunba Femi Deru, on Thursday, lamented over the pension system in the country, saying that pensioners have suffered immensely because of the poor administration of the pension system.
Speaking at the 2010 seminar/luncheon of the financial service group of the LCCI, tagged: Pension Reforms : Implications for Regulators, Administrators and Contributors, Deru said the pension system in the country has gone through decades of crises and that these weaknesses manifested in the huge pension arrears so much so that pensioners lost their lives as a result of the agony of not being able to sustain themselves.
“With the pension reforms and enactment of the Pension Act, sanity has been restored in the system , the working class on the pension scheme now has more confidence about the future.
Over 90 per cent of funds in Nigerian banking system are short-term funds, of less than one year. This has made it difficult for the banking sector to support the funding of the real sector and infrastructure development, few banks that do so, take the risk of exposing depositors’ funds to great risk” he stated.
Deru appeals that the pension funds should be made available for the financing of real sector projects and infrastructure, adding that this way, the fund would impact tremendously on the economic development of our country but however, should be done without undue exposure of the pension funds.
The Director-General, National Pension Commission (PenCom), Mr Muhammed Ahmad, said the implications of the pension reform on the regulator is to investigate pension operators or other parties involved in the management of pension funds, ensure wider coverage of the scheme to the informal sector and other sectors covered by the reform, impose administrative sanctions or fines on erring employers or pension operators, supervisory and regulatory framework for a sound and safe pension industry and ensure fair returns on pension fund investment.
According to him, the reform empowers contributors to report any pension issue which cannot be resolved by the PFA to PenCom, and assures them of funded retirement benefits. Contributors are required to notify PFA 6 months to retirement and provide all the necessary documents to enable efficient processing of their applications for access to retirement benefits, choose the mode of accessing retirement benefits and amount of lump sum at exit.
He said the future outlook for the pension reform is continuous improvement on risk_based supervision of the pension industry, effective capacity building drive for the industry, dynamic investment monitoring procedures that focus on risk issues, leverage relationship with other regulatory agencies and trade associations to enforce compliance, intensive sensitisation campaigns to create awareness among stakeholders, encourage unlisted companies to seek NSE quotation and to secure informal sector participation.