*As 170,000 pensioners draw benefit from scheme

By Victor Ahiuma-Young

WORKERS that have enlisted into the Contributory Pension Scheme, CPS, have hit 7.2 million, even as no fewer than 170,000 pensioners now receive monthly pensions from the scheme.

Speaking at Journalists’ conference in Calabar, Cross Rivers State, Director-General, DG, of the National Pension Commission, PenCom, Mrs. Chinelo Anohu-Amazu, disclosed that pension assets had climbed to over N5.9 trillion, invested in structured and safe financial instruments.

According to the DG, who was represented by the Commissioner, Inspectorate, Division, Professor Mohammed Kaoje, “the enactment of the Pension Reform Act, PRA 2004 was a significant turning point in the quest to bequeath a sustainable and efficient pension system for Nigeria. The main aim was to provide an enduring solution to the protracted challenges associated with pensions in both the public and private sectors.

The main highlights of the PRA 2004 included the introduction of the CPS to replace the Old Defined Benefits Scheme and the establishment of PenCom as the sole regulator of pension matters in Nigeria. We cannot overemphasize that the relative success of the implementation of the PRA 2004 could largely be attributed to the fundamental structures upon which the CPS was built. Indeed, the cardinal principle of separation of custody from management and supervision of pension funds has resulted in a pension scheme with sound internal mechanism for transparency and accountability.

“Whereas the Pension Fund Administrators, PFAs, manage the pension funds, they do not have access to same, since custody is vested in the Pension Fund Custodians, PFCs, while the Commission ensures both parties adhere strictly to regulations governing the pension funds. Some of the Major success indicators include the consistent growth in a large pool of pension assets of over N5.9 trillion, which are invested in structured and safe financial instruments; registration of 7.2 million pension contributors; 170,000 retirees under the CPS; amongst others.

However, these modest milestones notwithstanding, the implementation of the PRA 2004 was not bereft of challenges. Indeed, some issues were noted in the course of implementation since the PRA 2004 and this underscored the imperative for a comprehensive review of the PRA in order to consolidate on the Pension Reform. The re-enactment of the PRA in July 2014 provided a sound basis to guide the second decade of the Nigerian Pension Reform.

“The PRA 2014 sought to ensure that more tangible benefits accrue to retirees towards a more blissful retirement.

Some of the major developments introduced by the new law include an increase in monthly pension contributions to 18% from the previous 15%,  to ensure that retirement benefits are enhanced under the CPS for the benefit of contributors; reduction in the waiting period for contributors to access their Retirement Savings Account, RSA, in the event of temporary loss of job from 6 months to 4 months; stiffer penalties and sanctions for infractions; establishment of the Pension Transitional Arrangements Directorate, PTAD, to co-ordinate the smooth administration of the old DB Scheme of the public service; amongst others.