Pension Bills: Stakeholders say no going back to ‘EGYPT’
Stakeholders in the pension industry have asked the National Assembly to throw away the Bill seeking to exempt the police and paramilitary agencies from the Contributory Pension Scheme (CPS), as well as the Bill seeking to increase lump sum withdrawal to 75 percent.
This was the development at one a day public hearing on Bill for an Act to amend the Pension Reform Act 2014 held last week at the National Assembly Abuja.
They argued that the exemption Bill if allowed to be passed into law will further plunge the nation into more pension liabilities, as the current economy cannot sustain a Defined Benefit Scheme (DBS), where government will have to bear 100 percent of pension payments to employees.
According to them, passage of the exemption Bill and returning affected employees to the old DBS is like retuning to ‘EGYPT’, which from the Bible story depicts place of suffering.
They also believe that allowing employees who are not up to 50 years of age to access 75 percent of the balance in their Retirement Savings Account (RSA) will undermine the essence of the pension reform, and will further impoverish retirees at old age.
The stakeholders who stood their grounds against passage of the exemption Bills include the Nigerian Union of Pensioners (NUP); The Nigerian Labour Congress (NLC); Trade Union Congress; Central Bank of Nigeria(CBN); Office of the Secretary to the Government of the Federation(SGF); the Securities and Exchange Commission(SEC); Certified Institute of Pensioners and the National Insurance Commission (NAICOM).
Others who also spoke against the Bills includes the Centre for Pension Rights Advocacy, Pension Operators Association of Nigeria (PenOp), Pension Transitional Arrangement Directorate (PTAD) and the National Pension Commission (PenCom).
The paramilitary officers who turned out en-mass to cheer on the proposed Bills however got more enlightened on the operation of the CPS, as many people including the former director general of PenCom, Mohammad Ahmad opened their eyes on where the pension industry was coming from, and why the country cannot afford to go back to the old days.
Adamu Hassan Shekarau, chairman, House Committee on Pensions who took over from the Chief Whip of the house to moderate the public hearing said what happened at the public hearing is “an experimentation of democracy”, where everyone has had the opportunity to give their opinion.
He said it’s clear that majority of Nigeria’s are beginning to see the benefits of the CPS, assuring that every single contribution will be looked into.
Abel Afolayan, president, NUP said the successes recorded in the pension reform cannot be taken for granted, given where the country is coming from.
“We cannot afford to go back to the days of corruption riddled pension scheme”.
He warned of an incessant and haphazard amendment of the PRA 2014
Ayuba Wabba, NLC President who glowingly spoke against the two bills said “In the surface of it, these Bills are good, but in the reality they will doom the nation”.
“We cannot sustain a system that takes us back to the old scheme because we do not have the budgetary allocation”.
The Inspector General of Police, Ibrahim Idris, who was represented by Commissioner for Police, David Bodo, said the NPF Pension Fund Administrator (PFA) has done very well and that the police is of the opinion that it will remain with the CPS.
He said that Nigerian Police are not part of those seeking to exit from CPS rather that, its Pension Fund Administrator has done very well.
He called on the government to attend to issues already raised by the force which are being attended to by the National Pension Commission (PenCom), stressing that the welfare of the Nigerian police would be well taking care of under the CPS
The former Board Member National Pension Commission (PenCom) and Director, Centre for Pension Right Advocacy, Ivor Takor, who took house through the challenges of the DBS, and what the CPS has done for Nigeria, called for the killing of the Bill as it will burden government the more.
The Certified Pension Institute of Nigeria (CPIN) stated that exempting the paramilitary out of the scheme will be retrogressive to the economy, adding that PenCom should be empowered to regulate properly and be encourage to do more research and listen to people.
The Central Bank of Nigeria (CBN), kicked against the exemption of paramilitary, adding that the government may not have the money to cater for pensions of the workers if they are exempted.
CBN noted that going by current realities, especially now that the nation depends more on oil which the world are presently turning away from, it would be difficult to cater for the pension of members of the paramilitary if they are exempted.
President, Pension Fund Operators Association of Nigeria (PenOp), Longe Eguarekhide, said the critical thing with the CPS is funding, stressing that policy makers should always think of ways to improve lives instead of creating more burden for the government.
Aisha Dahir-Umar, acting DG, PenCom said exempting some government agencies would lead to divestment from FGN securities before maturity, which would have ripple negative effects on not only the finances of Government, but on the entire financial system.
“Another immediate negative impact of exempting these Agencies is the erosion of the pool of long term investible funds accumulated under the CPS, which is suitable for economic development of any nation as illustrated in other jurisdictions including developed economies.”
According to her, exemption of some agencies of Government would also result in loss of confidence in the pension reform and other reform initiatives of Government.
“It would also be contrary to public policy for the Federal Government to succumb to the clamour for exemption of its employees from the CPS, which has so far proven to be efficient, effective and beneficial as a pension administration system. “
She however noted that as it is the case with every human endeavour, the pension reform had its own share of challenges. “These challenges, however, could all be addressed within the framework of the CPS. Indeed, there had been many challenges that were over years addressed administratively by PenCom and recently through legislative action under the PRA 2014.”
“There is, therefore, a dire need to consolidate the gains of the CPS and avoid policy reversals, as this would undermine public confidence and negatively impact the Nigerian economy and Federal Government’s change agenda and economic recovery plans.”
Oluwole Oke, member House of Representative had on 16th May 2017 commenced sponsorship of a Bill seeking to “Amend the Pension Reform Act 2014 to exclude members of the Nigeria Police, The Nigerian ‘Security and Civil Defence Corps, Nigeria Customs Service, Nigeria Prison Service, Nigeria immigration Service and The Economic and Financial Crimes Commission From The Application Of The Contributory Pension Scheme and Other Related Matters”, was very unnecessary.