Stakeholder confidence continues to rise for Contributory Pension Scheme
The growth trajectory for the nation’s Contributory Pension Scheme (CPS) remained positive despite the challenges facing the economy and businesses, particularly those that have to comply with provisions of the Pension Reform Act 2014.
While expectation for improved remittance of (accrued rights) in the public sector continues with efforts by the National Pension Commission (PenCom) towards ensuring that pension is given priority by government, the growing enrolment by the private sector underscores growing confidence in CPS.
This is as the Commission continues to work on its internal mechanisms to respond to legitimate demands of retirees seeking reasonable retirement income, among other benefits.
The fourth quarter 2017 report by PenCom shows that the pension industry recorded a 1.46 percent growth in the scheme membership, moving from 7.78 million contributors at the end of the preceding quarter to 7.89 million. The growth in the industry membership was driven by the Retirement Savings Account (RSA) Scheme, which had an increase of 113,347 contributors representing 1.47 percent.
A breakdown of the RSA registrations indicates a 0.62 percent (21,306) increase in membership of the public sector over the third quarter of the same year to stand at
3,478,867. This figure represents 44.46 percent of the total RSA registration as at the fourth quarter of 2017.
The private sector shows a continuous dominance in RSA membership with 55.54 percent (4,345,044) of the total RSA registration as at the reporting period, moving from 4,253,003 in the previous quarter. The sector also witnessed a growth of 2.16 percent (92,041) in the quarter under review. This can be attributed to the increase in the level of compliance by the private sector as a result of the various steps taken by the Commission to improve compliance and coverage, as well as marketing strategies of the PFAs.
The total monthly pension contribution made by contributors from both the public and private sectors into their RSAs was N4.49 trillion as at the end of fourth quarter, 2017.
This shows an increase of N147.92 billion representing 3.41 percent over the total contributions as at the end of the previous quarter. A review of the aggregate total contribution shows that the Public sector contributed 51.20 percent of the total contributions, while the Private sector contributed the remaining 48.80 percent. However, during the quarter under review, the Public sector contributed 51.39 percent of the total contributions received while the Private sector contributed 48.61 percent.
The aggregate total pension contribution of the Private sector increased from N2.12 trillion as at third quarter of 2017 to N2.19 trillion as at fourth quarter of 2017, representing a growth of 3.40 percent. Whereas, the aggregate total pension contribution of the Public Sector grew by 3.42 percent from N2.22 trillion to N2.30 trillion over the same periods.
Meanwhile, total pension assets under management at the end of December 2017 stood at N7.5 trillion, while number of registered employees stood at 7.78 million people.
The Pension Reform Act 2014 has placed the future of workers in their hands by ensuring that they take active part in knowing how their pension is managed, right from your employers table to the mangers of the fund.
If you already have an RSA PIN, let your employer have it through the human Resource Department or Accounts Department for remittance of your contributions.
This is the beauty of the Contributory Pension Scheme (CPS) as provided in the Pension Reform Act 2004 and amended in 2014.
The whole essence of the pension scheme being to ensure that every person who worked in either the public service of the Federation, Federal Capital Territory or Private Sector receives his retirement benefits as and when due, gives the employee contributor rest of mind to continue his working career.
The Contributory Pension Scheme, as the name suggests, is contributory in nature, making it mandatory on employers and employees in both the public sector and private sector organisations with three or more workers to contribute 10 and 8 percent respectively of the emoluments of the employee into a Retirement Savings Account (RSA).
Apart from ensuring that every worker receives his entitlement as and when due, the other objectives of the scheme includes to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.