Pension

60,000 workers join CPS in three months

From left: Head, States Operations Depertment, National Pension Commission, Babatunde Philips; Chairman, National Association of Insurance and Pension Correspondents (NAIPCO)/ Insurance Editor Nation Newspaper Omobola Tolu-Kusimo and Head, Corporate Communications Department, PenCom, Peter Aghahowa at the event.

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Chuks Udo Okonta

About 60,000 workers from the public and private sectors joined the Contributory Pension Scheme (CPS) in three months thereby, pushing the number of Retirement Savings Account (RSA) holders from 8.79 million as at the end of the second quarter, June 2019 to 8.85 million as at the end of September, 2019.

The Acting Director-General, National Pension Commission (PenCom) Mrs. Aisha Dahir-Umar, stated this today, at the 2019 PenCom journalists workshop in Benin City, Edo State.

Speaking at the event, Mrs. Dahir-Umar, who was represent by Head, Micro Pension Plan Department,Kunle Odebiyi, maintained that the pension fund assets grown to N9.58 trillion.

According to her, Kaduna State, Federal Capital Territory (FCT) and seven other states are now fully remitting the pension contributions of both the employees and employers’ portion.

However, the pension industry had earlier witnessed a 1.78 per cent growth in the scheme membership during the second quarter of 2019, moving from 8.63 million contributors at the end of the first quarter, that is, March 2019, to 8.79 million in June 2019.

She attributed the consistent growth in pension scheme subscribers to increased awareness on the advantages and enforcement of the new pension scheme by the pension industry regulator, that is, the National Pension Commission(PenCom) and pension fund operators.

Similarly, as at end of third quarter of the current year, pension fund assets have grown to N9.58 trillion, from 2004 when the new pension scheme debuted, a feat made possible by new pension contributions received, interest from fixed income securities and net realised on equities and mutual fund investments.

Investment income, according investigation, was instrumental to the continuous growth in pension funds, despite the fact that government at the state and federal levels are not paying the monthly pension contributions of their workers as and when due.

This growth, she said, justifies PenCom’s emphasis on the safety of pension funds as the bedrock of sustaining the CPS, assuring all stakeholders that the pension reform remains steadily on course. “These modest milestones notwithstanding, the Commission and Pension Operators are committed to actualizing the growth potentials of the pension industry, ” she said.

On the theme of the workshop, which was, ‘Expanding Coverage of the Pension Industry’, she said, the Commission’s current strategic focus, is aimed at expanding access to pension as a veritable tool for economic development.

To her, “This aligns with the pension reform objective of old age poverty reduction and improvement in the welfare and general standard of living. The quest to expand coverage of pension is being pursued through some transformational initiatives especially the Micro Pension Plan.”

The Micro pension plan, she said, is targeted at the informal sector and self-employed who are not mandatorily covered under the CPS, noting that, it was designed with significant flexibility in recognition of the peculiarities of the targeted population.

On the other hand, she stated that the Enhanced Contributor Registration System (ECRS) is an in-house developed ICT application which was deployed in June 2019 to enhance the integrity of the contributors’ database.

“It has also been integrated with the National Identity Management Commission (NIMC) database to help authenticate the uniqueness of individuals seeking to register under the CPS. The ECRS provides a platform for the registration of Micro Pension Plan Participants and is a major step towards the introduction of the transfer window, which will enable contributors change to the PFAs of their choice, in line with Section 13 of the Pension Reform Act (PRA) 2014,” she stressed.

Meanwhile, of the 25 States that have enacted laws on CPS , only nine States have begun implementation and remitting both employer and employee pension Contributions.

The compliant states are; Kaduna, Federal Capital Territory(FCT), Lagos, Ondo, Edo, Osun, Anambra, Ekiti and Delta States.

According to the Head, States Operation Department, PenCom, Mr. Babatunde Phillips, of the nine states, five of them are funding accrued rights.

He said, Kaduna, the FCT, Osun, Delta, Anambra and Lagos States are funding acrrued rights while Edo, Ondo and Ekiti States are only implementing and remitting.

He stated further that, of the 25 states which have existing CPS laws, 13 of them had instituted pension bureaux or boards.

Philips noted that five states have employees retiring under the CPS and drawing pensions, adding that, four States have enacted laws on the Defined Benefits Scheme (DBS).

Seven states, comprising of; Kwara, Bauchi, Borno, Cross River, Akwa Ibom, Plateau and Katsina, he said, are still at the bill stage while Kano, Jigawa, Yobe, Gombe and Zamfara States are operating other pension schemes.

He noted that the right of States to enact their own pension laws have been a clog in the wheel of progress of the CPS, stating that, “some states delay in enactment of their laws and/or enact other laws at variance to the PRA 2014 and CPS principles.”Phillips also cited the lack of political will by state governors as well as inadequate funding as hindrances to the implementation of the CPS in States.

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