By Henry Umoru

…As Senate moves to amend Pension Act
ABUJA -Director General, National Pension Scheme, Alhaji Mohammed Ahmad, disclosed, weekend, that the Federal Government paid a total of N604.27 billion into the new Contributory Pension Scheme, CPS.

N449.35 billion of this has been remitted into the savings account of the Federal Government employees domiciled with the various pension fund administrators.

Ahmad, in a presentation on the way forward, to the Senate public hearing on the management of pension fund noted that this money had been credited to the contributory pension account with the Central Bank of Nigeria, CBN, just as he said another N94.17 billion was required this year to settle pension liabilities for workers expected to retire in 2012.

According to him, the total value of pension industry assets under CPS as at December 2011, stood at N2.45 trillionas while a total of 5.01 million employees in both public and private sectors were also confirmed to have registered with the CPS, adding that there is N22billion less to the N72.36 billion proposed in the 2012 budget for the payment of pension by the Federal Government alone.

Already, the Federal Government had paid N270.1 billion to 48.587 retirees and deceased workers so far under the  CPS.
There are, however, strong indications that the Federal Government may pay a staggered 5.12 per cent to 13per cent of its total wage bill into the retirement benefit account to cover pension liabilities between this year and 2039 when such liabilities are expected to be over.

The PENCOM boss who told the probe committee, weekend, that the proposed N72.36 billion for payment of Federal Government employees would be insufficient, said the government pension liability for this year was about N94.17 billion.

He, however, listed 10 areas for amendment in the 2004 Pension Reform Act, just as  there is a proposed upward review of the five per cent Federal Government contribution to the Retirement Benefit Bond Redemption Fund, RBBRF, account, adding:  “Based on the actuarial valuation conducted, it was recommended that the Federal Government needs to pay into the RBBRF account, staggered five yearly rates of 13 per cent, 11, 10.5 , 8.5 and 5.12per cent of its total wage bill commencing from 2012 to 2035 as against fixed of five per annum which is grossly inadequate.

He told the Senator Aloysius Etok-led Committee that the commission had so far licensed 23 Pension Fund Administrators, PFAs and four pension fund custodians, PFCs, adding that the implementation of CPS in the last seven years has not been without challenges.

Meanwhile, plans are underway by the Senate to finally amend the 2004  Pension Reform Act to increase the government contribution to retirement benefit account from the current five per cent of its wage bill to about 13 per cent and when this is done, government may however pay more next year.

In his remarks, Chairman of the Senate probe committee, Senator Etok had said at the end of the exercise, Senate would then be able to take an informed decision on how best to address the many problems of management of pension funds.