Anohu-Amazu’s big shoes and Dikko’s new challenge

It is exactly one week and one day today that the erstwhile Director General of National Pension Commission (PenCom), Chinelo Anohu-Amazu handed over to the most senior staff of the commission, after four years and five months of service to Nigeria.

Anohu-Amazu was appointed acting Director General in December 2012, confirmed substantive Director General on September 30, 2014 and eased out of office along with 21 other heads of Federal Government agencies on April 13, 2017.

She served over 7.2 million pension contributors, and supervised 21 pension fund administrators (PFAs), seven CPFAs and five pension fund custodians (PFCs).

In the course of her service, pension assets grew from N2.9 trillion in 2012 to N6.7 trillion in 2017. The RSA also increased from 5.39 million to over 7.2 million.

To her credit, perhaps, the average monthly pension contribution rose to N30 billion as at October 2016 and pension assets were equivalent to 5.84 per cent of the nation’s rebased GDP as at the same time. On her watch, 165,000 workers had retired under the contributory pension scheme as at September 2016. The retired workers are currently receiving pension as and when due.

Anohu-Amazu and her team led a quiet revolution in the pension industry in Nigeria. She led the successful amendment of the Pension Reform Act (PRA) 2004, which marked the watershed in the pension industry in Nigeria. The key changes the PRA brought to bear in the industry include the following:

  • Establishment of Pension Transition Directorate Department (PTAD) for direct transmission of the benefits of pensioners under the old scheme to their accounts without the involvement of a third party – the pension departments;

 

  • Creation of new offences regime and provisions for stiffer penalties against infractions on pension law or management or diversion of pension funds and assets under any guise (PRA 2014 criminalizes attempt to commit an offence and imposes the same penalty as committing the offence). Penalties for misappropriation of pension funds have been increased from such that operators who mismanage pension funds will be liable to a term of 10 years imprisonment upon conviction and also pay a fine equal three times the amount misappropriated.  In essence, anyone who misappropriates or steals N100 million will pay N300 million plus at least 10 years imprisonment. The convict will also forfeit any property, assets or fund with accrued interest or the proceeds of any unlawful activity under this Act in his/his possession, custody or control to the Federal Government

Others are:

  • The inclusion of the informal sector in the pension scheme via the introduction of the micro pension scheme; increase in contribution rate for employer and employee from 7.5% to 10% and 8% respectively; introduction of minimum pension guarantee; introduction of pension protection fund; establishment of the Retirement Benefits Bonds Redemption Fund (RBBRF) accounts with the Central Bank of Nigeria, and expansion of CPS coverage to states.

 

Known for her strong will and commitment to the pension industry, Anohu-Amazu will be missed for her total adherence to every detail in the statute book. This was exemplified in the implementation of the Pension Reform Act 2014 and the management of PenCom. Her usual question: “Is that what the law says?” The question resonates in every meeting.

Anohu-Amazu, a lawyer by profession, obtained an LL.B degree from the University of Nigeria, Enugu Campus in 1996, a B.L from the Nigerian Law School in 1997 and an LL.M in Computer and Communications Law from the London School of Economics in 2000.

She also studied in many prestigious institutions such as the Wharton Business School, University of Pennsylvania in 2002, the J. F. Kennedy School of Government of the Harvard University in 2007 and the Columbia University Graduate School in 2008.

PenCom Director General-nominee, Aliyu Abdurahman Dikko is also a well-known person in the pension industry. However, should he successfully upturn the legal issues surrounding his appointment and gets Senate nod, he will need to do more to meet the standard set by his predecessors.

He will need to set in motion the implementation of the micro pension scheme, for which strategic plan has been laid. The staff and structures have also been put in place.

The micro pension scheme is the next big thing expected to happen before the end of the first half of 2017. Many stakeholders, at least, expect it to happen. PenCom’s goal is to bring the informal sector into the CPS, reduce old age poverty and extend the scheme to self-employed and people working in the informal sector.

“The Commission is targeting to extend coverage to a total of 20 million Nigerians in 2019 and 30 million by 2024,” a PenCom documents seen by Businessday said.

Dikko will need to work with other regulatory agencies to work-out modalities for the investment of pension funds in infrastructure. Housing deficit alone requires approximately N45 trillion, according to one estimate.

Dikko must ensure that Nigerian National Petroleum Corporation (NNPC) joins other self-funding government agencies to switch over to the CPS. Prior to his appointment, PenCom was commencing a comprehensive audit of compliance by all parastatals with the CPS. He will need to tackle the delay in remittance of pension contributions into Retirement Savings Account of Federal Government personnel. At the last count in December 2016, the outstanding was N184 billion. There are also issues with the contributions remitted under the IPPIS.

The Federal Government is yet to implement the new 18% minimum rate of pension contributions as stipulated by Section 4 (1) of the PRA 2014 – 10% by employer and 8% by employee. It has not implemented a review of Accrued Pension Rights as provided by Section 15 (4) of the PRA 2014 pursuant to section 173(3) of the 1999 Constitution (as amended). Similarly, the Federal Government is yet to implement the 33% pension increase for pensioners under the CPS.

All these will form the bulk of the immediate challenges to be surmounted by Dikko. And most importantly, he has to work hard on how to continue to ring-fence the over N6.3 trillion pension assets and ensure compliance by all concern.

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