MRS. AISHA DAHIR-UMAR
WELLCOME REMARKS BY MRS. AISHA DAHIR-UMAR, ACTING DIRECTOR-GENERAL, NATIONAL PENSION COMMISSION, AT THE WORKSHOP ORGANISED FOR JOURNALISTS AT LE MERIDIEN IBOM HOTEL AND RESORT UYO, AKWA IBOM STATE ON 03, MAY 2018
Distinguished Ladies & Gentlemen
I am highly delighted to welcome you to the 2018 Journalists’ Workshop organised by National Pension Commission for Business Editors, Finance, Insurance/Pension and Labour Correspondents. The Commission is indeed honoured by your attendance at this workshop in spite of your tight schedules.
2. As you are aware, this workshop had always provided the Commission with a platform to interact with the Business Editors and Correspondents, to discuss developments in the pension industry, our achievements and challenges as well as receive feedback on our performance. Through this, we are optimistic the general public would be better informed about pension related issues.
3. It is worthy of mention that the Commission had maintained cordial relationship with the Media and has always supported objective reporting of pension issues.
4. The theme of this year’s workshop is: ‘Contributory Pension Scheme: Achievements and Challenges”. Three papers are slated for presentation. Two of these papers would be presented by officers of the Commission, first on the “Benefits Payment Arrangement under the Contributory Pension Scheme” by Mrs. Ekanem Aikhomu, Head, Benefits & Insurance Department and the second on “Understanding the Multi-Fund Structure of Pension Funds” to be delivered by Mr. Ehimeme Ohioma, Head of Investment Supervision Department. The third and final paper is on the “Service Delivery under the Contributory Pension Scheme” to be presented by Mrs. Aderonke Adedeji, President of the Pension Fund Operators Association of Nigeria (PenOp).
5. Distinguished Ladies and Gentlemen, let me apprise you of some positive developments in the Contributory Pension Scheme in recent time.
i. Growth in the Number of Pension Contributors
The number of contributors had grown by 390,000 as it increased from 7.50 million as at 31st March, 2017 to 7.89 million as at 31st December, 2017 and then to 7.90 million as at 28th February, 2018. The Commission is intensifying efforts at ensuring the provision of necessary infrastructure for the launching of the Micro Pension Scheme in line with the Commission’s strategic objective of expanding coverage of the CPS to the under-served sectors. This is a major kernel of the strategy for expanding coverage of the Contributory Pension Scheme. Meanwhile, the Guidelines for the Micro Pension Scheme are being finalized preparatory to the commencement of the scheme.
ii. Growth in Pension Assets
The net assets value of the pension assets of the Contributory Pension fund was N7.779 trillion as at 28 February, 2018. This represents an increase of N270 billion up from the value of N7.52 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.
iii. 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 have 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.
iiii. 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.
v. Efforts at Settling the Outstanding Pension Liabilities of the Federal Government
The Commission served as a member of an Inter-Ministerial Committee, Chaired by the Honourable Minister of Finance, that was set up by Mr. President to determine the total pension liabilities of the Federal Government under both the CPS and the Defined Benefits Scheme, and advise the Government on the amount required to be provided in the budget to defray the pension obligation. The Commission has determined the total pension liability owed to the Contributory Pension retirees due to both the 15% and 33% pension increases of 2007 and 2014 respectively. In addition, the outstanding accrued rights of Federal Government employees who retired in 2017 as well as the amount due to those retiring in 2018, have been submitted to the Federal Government for appropriation in the 2018 budget. Based on the positive disposition of the Federal Government towards settling outstanding pension liabilities, as evidenced by the release of N54 billion in April 2017, it is expected that these liabilities will soon be cleared.
6. Finally, I encourage you to make this Workshop as interactive as possible, by sharing your concerns and seeking clarifications from our Team. Furthermore, I wish to assure you that your feedback will be given a deserving attention, in keeping with our philosophy of consultations.
7. On behalf of the Commission and the entire pension industry, I would like to express our profound appreciation to the media for your consistent support, which greatly assisted us to record the recent modest achievements in the pension industry.
8. Thank you and God bless us all.