Director-General, National Pension Commission Aisha Dahir-Umar
Director – General’s Welcome Remarks on the Occasion of Oversight Visit of the Senate Committee on Establishment & Public Services to the National Pension Commission on Wednesday, 14th April, 2021
Protocol
1. On behalf of the Management and staff of the National Pension Commission (PenCom), I wish to warmly welcome the distinguished Chairman and members of the Senate Committee on Establishment and Public Service to PenCom.
2. Indeed, the Commission has, since inception, enjoyed a very cordial working relationship with the Senate Committee on Establishment and Public Service. We would like to note with delight and solemn gratitude that this relationship and support have been bolstered under the current National Assembly.
3. Distinguished Senators, as you are aware, PenCom was established by the Pension Reform Act 2014 as the sole regulator and supervisor of pension matters in Nigeria. The Commission’s statutory mandates include licensing and supervising the activities of pension operators, public enlightenment on pension matters and ensuring compliance with the provisions of the PRA 2014. PenCom’s mandate also extends to the supervision of PTAD and other Federal Government agencies involved in the administration of pensions. We also promote the adoption of the Contributory Pension Scheme by State Governments and provide technical assistance in the implementation of the Scheme by the States.
4. PenCom has, within the 16 years of the pension reform, been able to positively transform the pension sector in Nigeria. Our scorecard includes many positive feats, like the licensing of 22 PFAs, 7 CPFAs, 4 PFCs and many Approved Existing Pension Schemes in the private sector. RSA registration has reached 9.27 million as at January 2021 and the value of accumulated pension assets has also reached N12.3 trillion as at January 2021. The fund is currently invested in varied but quality financial instruments, all tailored towards the development of the Nigerian economy. Furthermore, payment of pensions under the CPS is now seamless, prompt and consistent.
5. In the recent years, the Commission has introduced the Micro Pension Plan to enable informal sector workers participate in the CPS and also continued to empower the RSA holders by broadening their choices through Multifund Structure of pension fund investment and the opening of the RSA Transfer window. The Commission would continue to innovate in order to consolidate the gains of the pension reform in Nigeria.
6. As you are aware, PenCom is a self-funded agency, run basically with Internally Generated Revenue (IGR), with little subvention from the Treasury. The operations of PenCom has been fairly smooth right from inception to date. Our supervisory activities continued to be substantially automated, thus necessitating huge investment in ICT. Furthermore, the nature of our regulatory and supervisory responsibilities necessitated substantial investment in our human capital in order to remain effective, competitive and relevant in a continuously changing environment.
7. PenCom is currently housed at this Head Office building, which is owned by the Commission. There are also six functional zonal offices of the Commission at the six geopolitical zones of Nigeria, which distinguished Senators have visited few days ago. At the end of my welcome remarks, I will crave your indulgence to allow the Commissioner (Administration) to elaborate on the facilities available in our offices for your kind information. You may also wish to inspect same at the end of this brief.
8. It is perhaps appropriate at this juncture to highlight some of the major challenges of the Commission. As you are aware, the fundamental objective of the pension reform is to ensure that every worker receives his retirement benefits as and when due. However, it is sad to report that there are, today, a large number of Federal Government employees who retired from March 2020 to March 2021 under the CPS that are yet to receive their pensions due to non-payment of their Accrued Pension Rights. This challenge, which started in 2014, was essentially triggered by the appropriation of insufficient amounts for payment of Accrued Pension Rights of FGN retirees and further aggravated by late or non-release of full appropriated amounts.
9. Other challenges include FGN’s non-compliance with the new minimum statutory rate of pension contribution of 18% since 2014; non-payment of approved 15% and 33% pension increases to pensioners under the CPS; non-payment of shortfall for payment of full retirement benefits of retired Heads of Service and Permanent Secretaries; and non-payment of FGN Pension Protection Levy. These have created sad and negative impression on the full realization of the objectives of the CPS in Nigeria.
10. PenCom appreciates the role played by this Senate Committee in the past, to move the National Assembly to intervene in the matter of payment of outstanding pension liabilities of the Federal Government. However, we still have not yet surmounted this challenge, because pension liability is a moving target that increases on monthly basis as FGN employees retire. Thus, like the proverbial Oliver Twist, we would to, once again, solicit the continued support of this distinguished Senate Committee to assist the Commission in surmounting this challenge of outstanding pension liabilities of the Federal Government to its workers and retirees.
11. Another issue that is worth mentioning to this distinguished Committee is the persistent complaints against certain sections of the Pension Reform Act 2014, which need amendments. This is normal with every new system and the experience of the CPS in Nigeria is bound to be the same. Consequently, the Commission had obtained inputs from critical stakeholders and cataloged their proposed amendments of provisions of the PRA 2014. However, as was done in the first review exercise that birthed the present Act, it is imperative to subject the proposed amendments to extensive experts’ and stakeholders’ engagements prior to presentation to the Federal Executive Council and then National Assembly for further legislative action. We are happy to note that the Distinguished Chairman of this Senate Committee has committed to support these processes from the early stage and collaborate with the House Committee on Pensions in order to ensure a smooth and qualitive exercise.
12. Distinguished Chairman and Senators, thank you for listening and, once again, welcome to PenCom.
