Participants at the event
I am delighted to deliver this address at this auspicious occasion of 3rd Edition of National Insurance & Pension Correspondents (NAIPCO) National Conference. I would like to start by expressing our appreciation to NAIPCO for its unflinching support and determination in educating and enlightening the public on the implementation of the pension reform.
2. I am also glad to mention that the National Pension Commission had maintained cordial relationship with NAIPCO and had always supported objective reporting of pension issues. To that end, we would like to assure you that PenCom will continue to collaborate with NAIPCO and our doors will always remain open for clarification on issues that have to do with the operation of the Commission and the general administration of pension in Nigeria.
3. Distinguished Ladies and Gentlemen, may I at this juncture apprise you of some positive developments in the Contributory Pension Scheme (CPS) in recent times.
Growth in the Number of Pension Contributors
The number of contributors had grown by 312, 291 as it increased from 7.89 million as at Dec, 2017 to 8.14 million as at June, 2018.
Growth in Pension Assets
The net assets value of the pension assets of the Contributory Pension fund was ₦8.23 trillion as at June, 2018. This represents an increase of ₦716.94 billion up from the value of ₦7.52 trillion as at 31st December, 2017. This increase is attributed to new contributions received, interest/coupon from fixed income securities and net realised/unrealised gains on equities and mutual fund investments.
Enhancement of Pensions of Retirees under the Programmed
In order to enhance the monthly pension of retirees in the Contributory Pension Scheme, the Commission initiated the Pension Enhancement Programme. It was discovered that the returns being generated by the PFAs on the balances of the RSAs of majority of retirees could be used to enhance their monthly pensions. Consequently, the Commission sought for and obtained the approval of the Secretary to the Government of the Federation to implement the pension enhancement, which resulted in increased monthly pensions for most retirees receiving pension under the Programmed Withdrawal arrangement. Accordingly, the PFAs commenced the enhancement of pensions of all retirees under Programmed Withdrawal with effect from December 2017.
The implementation of the pension enhancement is one of the significant milestones attained since the commencement of the CPS. It confirms that the CPS has workable internal mechanisms to respond to legitimate demands of retirees as they seek a reasonable retirement income. The Commission intends to sustain this periodic review exercise in line with relevant provisions of the law.
Review of the Programmed Withdrawal Template
As you may be aware the Commission introduced a new template for programmed withdrawal, which took effect from 15th May, 2018. There has however being concerns expressed by some stakeholders. The Commission in its usual responsive and consultative manner has decided to review the template. Consequently, the Commission has directed that Pension Fund Administrators (PFAs) revert to the old template till further notice.
Circular on Voluntary Contributions
The Commission issued a Circular on Withdrawals from Voluntary Contributions (VC) in November, 2017. The Circular was necessitated by the observed incidences of high rates of withdrawals from VCs by contributors, which appeared to negate the main purpose of using such contributions to augment pensions at retirement. In addition, the Commission seeks to ensure strict adherence to Anti-Money Laundering provisions and relevant taxes laws. The main thrust of the Circular is that 50% of the VCs can be withdrawn once in every two years, while subsequent withdrawals would be on incremental contributions from the last withdrawal. Furthermore, the remaining 50% of VC shall be domiciled for augmenting pensions upon retirement.
vi. The Status of the Micro Pension Plan
It is pertinent to inform you that the Commission has released the draft Guidelines and framework on the Micro Pension Plan to the Licensed Pension Operators and the various stakeholders. Feedback from the stakeholders and operators have been received, considered and incorporated. The final guidelines for the Micro Pension Plan(MPP) will be released as soon as they are approved.
Meanwhile, the Commission is developing the required ICT infrastructure to drive the process and this is critical to the success of implementing the Micro Pension Plan. It is envisaged that before the year ends, the plan will commence.
4. Finally, I encourage you to make this conference as interactive as possible, by brainstorming on the best ways the association will enhance its collaboration with all the relevant stakeholders with the view to promoting adequate coverage of the pension industry. Furthermore, I wish to assure you that your feedback will be given a deserving attention, in keeping with our philosophy of consultations.
5. On behalf of the Commission and the entire pension industry, I would like to express our profound appreciation to NAIPCO for its consistent support, which greatly assisted us to record the recent modest achievements in the pension industry.
6. Thank you and God bless us all.