Garlands for Presidential Approval and Driving Economic Development through a Sustainable Pension Industry
The Coalition of Civil Societies and Media Executives for Good Governance in Nigeria (COCMEGG), a policy and advocacy non-governmental, non-profit pressure group of over 350 civil society organizations (CSOs) and non-governmental organizations (NGOs) spread across the country has passed a vote of confidence and applauded the high ethical standards restoring of citizens’ confidence, good corporate culture and the reformation taking place within the Pension Industry.
This aimed at the sustainable development of Nigerian workers and for the prosperity of the nation in order to foster a sound pension industry that is anchored on good corporate governance that is consistent with international best practices.
Recently, the Presidential approval for the payment of outstanding pension liabilities under the Contributory Pension Scheme(CPS) is a landmark and milestone achievement by the President Muhammadu Buhari’s administration and the Aisha Dahir Umar’s led management as stakeholders and retirees of the treasury funded Federal Ministries, Departments and Agencies (MDAs),will enjoy the benefits of payment of some critical aspects of the outstanding pension liabilities under the scheme.
This includes the payment of outstanding accrued pension rights for the verified and enrolled retirees that retired but are yet to be paid their retirement benefits as well as backlog of death benefits claims due to beneficiaries of deceased employees of the treasury funded MDAs.
Accordingly, the payment of 2.5% differentials in the rate of employer pension contribution for Federal Government of Nigeria retirees and employees is a novel objective, worthy of commendation resulting from the increase in the minimum pension contribution for employers from 7.5% to 10% in line with Section 4(1) of the PRA 2014.
However, it is note worthy to state that the Federal Government is expected to continue with the payment of the 10% rate of employer pension contribution for its employees, thus ensuring a remittance of at least 18% monthly (employer 10% and employee 8%) as provided by the PRA 2014 respectively. This settlement of the outstanding accrued pension rights and compliance with the reviewed rate of pension contributions are significant development according to COCMEGG and have resolved the challenges in these aspects that have lingered since 2014.
This was contained in a press release issued by the President of the Coalition, Omoba Kenneth Aigbegbele, who attributed that the National Pension Commission (PenCom) has become a benchmark of success and a reference point in Nigeria, including the paradigm shift and change as a result of the personal sacrifices in building strong institution, robust management of pension funds and performance measurement indices and productivity templates put in place by the current Director-General, Aisha Dahir Umar, who has placed the industry’s growth and good governance structure for the common good of retirees and Nigerian workers which is a cynosure to the worthy development deserving accolades from far and near due to the prompt payment of pension to retirees.
The management has given marching orders to Pension Fund Administrators (PFAs) and PFCs and Directorate of Licensing Pension Operators to work within the ambit of established rules and guidelines, within the Act establishing PenCom so as to shore up confidence of investors into the country and grow investments for the interest and the generality of the industry at large.
The release emphasized that the strong regulatory framework put in place has addressed inherent weaknesses and administrative abuses and sharp practices within the system and as such both stakeholders and industry watchers are of the opinion that indeed there is a breadth of fresh air as management is on top of the issue of restoring investors’ confidence like never before and making sure that the industry is ahead of competitors and is abreast with global standards and ethics.
COCMEGG stated that, due to the current reformation in the pension industry, it has enhanced incremental accumulation of pension funds and assets which have drawn the attention of state executives and administrators who are now keen to do business with the apex regulator as a result of transparency and accountability in the handling of the pension matters and policies put in place by management.
This has drawn wide applause from both within and outside the country and created the needed impetus for investors’ confidence in the system which is informed by the deliberate policy direction, management style which has drastically reduced pension liabilities of both federal and state governments.
Since the present leadership took over the helm of affairs which is worthy of emulation and a pat on the shoulder of the regulator.
Accordingly, the pension assets as at today are running into trillions of Naira and has extended it innovation of capturing the informal sector also known as the (Micro Pension) which is today also a toast and a veritable platform to shore up the financial base of the industry and the growth of the economy. This is attributed to the corporate culture of investment monitoring of pension funds, regulation, and the supervision of all pension matters on daily basis to see that they conform with industry stands so as to build stakeholders, retirees’ confidence for the greater good of the country.
The release further affirmed that the present leadership has enhanced capacity building within the industry, institutional strengthening of Pension Funds Administrators (PFA), Pension Funds Custodians (PFCs) and has taken notice, investigated complaints of impropriety made against its PFAs and PFCs or employees for proper discipline, and punitive measures and has expended resources to build the capacity of these institutions so as to cope with the new ethics and standards put in place for the growth of the industry.
COCMEGG agrees that the present leadership of PenCom has enhanced advocacy for states and organizations that are not part of the Contributory Pension Scheme (CPS) to do so and join the moving train and are also seeking the assistance of organizations who are deducting pensions from source of staff salaries to remit same to the regulator for the employee to enjoy his or her retirement benefits.
The apex organization, according to COCMEGG findings, has carried out strategic town-hall meetings on industry standards, ethic and fund portfolios across the country to change the narrative, shape opinions and deconstruct conversations and bring as many people/workers on board to reap the dividends of the CPS.
It has also continuously carried out commercials on electronic media and advertorials in newspapers consistently to assuage would-be retirees to seek proper advice before and after retirement so as to enjoy their retirement age and benefits.
However, as part of the organization blueprint for manpower development and capacity building, it has enhanced the ICT sector and upgraded ICT infrastructure to boost technology such as the design and development of the Enhanced Contributor Registration System (ECRS), an electronic platform for the submission of reports by Pension Fund Administrators (PFAs) for the registration of contributors and issuance of Personal Identification Numbers (PINs), which has been integrated with the National Identification Management Commission (NIMC) for authentication of individuals who seek to register under the CPS. This platform is a major step towards the introduction of the transfer window, which will enable contributors change to the PFAs of their choice, in line with Section 13 of the Pension Reform Act (PRA) 2014.
As the apex regulatory body, it is a firm believer of “Best place to work” and as such has put everything in place, including state of the art, equipment, office furniture, environment and structures to enhance the output and productivity of its workers and in order to shore up states’ participation in the CPS, it has on intermittently basis, published list of states that are part of the CPS and also those that are not, so as to encourage states that are at the lowest ebb of their processes to be up and doing, a scheme that is been applauded across the country for the interest of retirees.
However, industry watchers and pundits have all agreed that indeed the new management is on course to change the narrative of the pension industry and has enhanced its stakeholders and workers engagement platform on a very robust level, thereby boosting its relationship across board for the growth of the industry where workers now advocate on behalf of the regulator for others to join the scheme, while it is also letting Nigerians know that the few challenges being faced are as a result of the employees, workers and states that are not captured but allow the retirees to suffer untold hardships according to COCMEGG findings, which PenCom is doing everything within its regulatory powers to streamline the loopholes and block leakages been taken advantage of by employers and states not captured.
COCMEGG therefore endorses the transformational philosophy of innovativeness and good corporate culture at PenCom and calls for a more closer collaboration, partnership with stakeholders, retirees and worker so as to safeguard and regulate the industry and lay a solid foundation for the wellbeing and prosperity of Nigerian workers at all times and boost investors’ confidence for the overall development of the nation and to enhance the regulation and supervision of the pension industry.