BY VICTOR AHIUMA-YOUNG

NATIONAL Pension Commission, PenCom, has said that to further enhance the effectiveness of the Contributory Pension Scheme, CPS, the commission is proposing the amendment of the PRA 2004 to review the rate of pension contributions.

The review will also cover the definition of total emoluments, provision for funding of the minimum pension guarantee and provision for contributors to use part of their Retirement Saving Account, RSA, balance to secure mortgage amongst others.

At a one-day interactive session with leaders and affiliates of Nigeria Labour Congress, NLC, in Benin City, Edo State, Director-General of PenCom, Mr. Mohammed Ahmad, explained that the Commission had been making efforts with a view to ensure a vibrant and sustainable pension industry that positively impacts on the welfare of the worker, particularly at retirement, while providing the much needed funds for the economic development of our dear nation.

Represented by the Commission’s Head of Compliance and Enforcement, Muhammad Umar, the DG said the industry had continued to witness steady growth and that Pension assets as a percentage of Gross Domestic Product, GDP, had grown steadily from 1.5 per cent in 2006 to about 8.5 per cent by December, 2011.

Ahmad noted that the Scheme had accumulated N2.4 trillion investible funds that would enable payment of retirement benefits as well as assist in the economic development of the country.

According to him, “In an effort to promote a stable and sustainable pension industry that would guarantee reasonable income on retirement, the Commission adopted zero tolerance for non compliance and consultative supervisory philosophy in the issuance of guidelines and regulations of the pension industry.

The Commission continued to issue guidelines and regulations while reviewing existing ones to further entrenched sound corporate governance in the industry and ensure adequate protection of pension assets.

To this end, the Commission has issued Revised Investment Regulations (which introduces the multi fund structure), Guidelines for registration of State and Local Government employees and Circular on New Minimum Capital Requirement for Pension Fund Administrators among others.

“The minimum capital requirement would ensure that operators deploy adequate resources to enhance the provision of service delivery to their clients. We are also working with other regulatory agencies to promote the development of alternative assets classes in which pension funds could be invested to promote national development.

In addition, the Commission would soon issue a guideline for informal sector participation in the Contributory Pension Scheme which will provide an opportunity for those in informal employment to make voluntary contributions as savings to cater for their retirement.”

In its efforts to ensure adherence to all extant laws, the Commission issued a circular to all Self Funded Parastatals to implement the constitutional provision as stated in the Circular from National Salaries, Income and Wages Commission relating to increase in pension portion of the accrued rights of employees that transited from Defined Benefit Scheme to the Contributory Pension Scheme.

Not only does this ensure compliance with constitutional provisions, but it also ensure that benefits under the Contributory pension Scheme are adequate and in line with economic realities. To further enhance the effectiveness of the Contributory Pension.

Scheme, the Commission is proposing the amendment of the PRA 2004 to review the rate of pension contributions, the definition of total emoluments, provision for funding of the minimum pension guarantee and provision for contributors to use part of their RSA balance to secure mortgage amongst others.”