Operators strengthen collaboration with Legislators for sustainable pension industry

The role of Lawmakers (Legislators) in the successful implementation of the ongoing reforms in the nation’s pension industry, as well as sustaining the achievements of the Contributory Pension Scheme (CPS), now in its 14th year, after enactment of the Act in 2004 cannot be over emphasidsed.

Beyond passing the Bills that produced the Act in 2004 as amended in 2014, the law makers particularly the Joint Committees of the Senate Committees on Establishment and Public Service and the House of Representative Committee on Pension have critical roles to play in ensuring effective implementation of different sessions of the law, particularly where it affects the executive arm of government in terms of budgetary provisions and execution.

This accounts for why the Pension Fund Operators Association of Nigeria (PenOp) last week in Calabar the Cross River State Capital held the maiden Retreat for the Joint Committees of the Senate Committees on Establishment and Public Service and the House of Representative Committee on Pension.

Major fallouts of the Retreat was the importance of a regular interaction between pension operators and the legislators, so that the National Assembly Members can be regularly informed and updated on developments in the industry because of the importance and sensitivity of pensions to the overall welfare of the citizenry.

According to the legislators, understanding the challenges, which the operators are going through in terms of funding of the scheme by government for her employees, as well as the private sector will enable early interventions and great oversights for sustainability and growth.

During the Retreat, the legislators were taken through two key topics: “Understanding the Operations of the Contributory Pension Scheme in Nigeria” by Wilson Ideva, CEO, High Street Consulting Ltd; while the second topic “ Investment of Pension Assets in Nigeria” was taken by Dapo Akisanya, managing director/CEO, AXA Mansard Pensions Limited.

Emmanuel Paulker, chairman, Senate Committee on Establishment and Public Service of the Senate said during an interview at the end of the Retreat that the event has offered the legislators the opportunity to better understand the operations and workings of the Contributory Pension Scheme, as well as the gaps which he stated will assist legislators in their oversight functions.

“I will advise that this interface with the operators is more regular because it has actually exposed us to some of the difficulties the industry is facing, which if we had sat in the comfort of our chambers we would not have been able to know”

Paulker said, with what has been discussed here today, our oversight functions on the industry will be strengthened because we are better equipped with knowledge of the operations of the industry.

He also promised to work closer with the PenCom and PITAD towards ensuring that government pays outstanding pension accrued rights, so that affected retirees who have left services and are stranded can start to receive their pensions, Paulker stated.

Ronke Adedeji, president, PenOp said during an interview that operators are happy to have successfully organized this Retreat because you can not underestimate the value in this partnership with our legislators, who are our major stakeholders.

She said, from now going on, there will be a lot more interactions because we need their interventions from time to time, to ensure sustainability of the scheme.

Speaking on the achievements of the CPS, Dahir-Umar, acting director general, PenCom said it is now fourteen years since the introduction of the CPS and i am pleased to note that appreciable progress has been made.

Dahir-Umar stated that as at August, 2018, the pension industry membership has grown to 8.31 million participants, while the size of the Pension Fund Assets stood at N833 trillion.

“The number of retirees receiving benefits under the CPS as at August 2018 was 245,657. Out of that number, 89.308 retirees are on programmed withdrawal and 56,349 have opted for annuity. In the same vein death benefits had been paid to 52,468 beneficiaries”,

“These statistics she stated are clear evidence that the CPS has greatly improved access to retirement benefits for employees in both the public (Federal Government) as well the private sectors. lt has also helped to improve the issue of funding even though some work is still needed in that regard.”

Wilson Ideva, managing director/CEO, High Street Consulting Ltd while responding to questions from the legislators said there is no idle fund in the pension industry as many people are speculating, stating the N8.3 trillion of pension assets has been fully deployed into different asset classes as provided in the pension investment act.

According to him N709.511 billion equal to 8.62 percent has been invested into the capital market, stating that without this money the capital market would not have been what it is today.

The key objectives of the scheme are to ensure that every person who has worked in either the public or private sector receives his retirement benefits as and when due; assist improvident individuals by ensuring that they save to cater for their livelihood during old age; establish a uniform set of rules and regulations for the administration and payment of retirement benefits in both the public and private sectors; and stem the growth of outstanding pension liabilities.

CPS is contributory, fully funded, based on individual accounts that are privately managed by Pension Fund Administrators with the pension funds assets held by Pension Fund Custodians.