WELCOME REMARKS BY CHINELO ANOHU-AMAZU, DIRECTOR GENERAL, NATIONAL PENSION COMMISSION AT THE STAKEHOLDERS’ SENSITIZATION CONFERENCE ON PENSION REFORM ACT 2014 ORGANISED BY THE NATIONAL PENSION COMMISSION AT HOTEL 17TEEN, KADUNA ON WEDNESDAY 9 DECEMBER, 2015
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Distinguished ladies and gentlemen, I am pleased to welcome all of you to the Stakeholders’ Sensitization Conference on the Developments Ushered in by the Pension Reform Act 2014 (PRA 2014) organized by the National Pension Commission. We are particularly honoured by the presence of very distinguished personalities who, have found it worthwhile to accept our invitation to serve in various roles at this conference. I must, in particular, acknowledge the Executive Governor of Kaduna State, Mallam Nasir Ahmad El-Rufai, whose presence here and continuous support to the Commission’s initiatives is a demonstration of his unwavering commitment to the success of the pension reform and the welfare of Nigerian workers. As we remain focused on our core mandate of implementing the Contributory Pension Scheme (CPS) and ensuring effective pension administration in Nigeria, the support from stakeholders has been very encouraging indeed.
The North-West Zone Conference holding today, in Kaduna, Kaduna State, is the fifth in the series of conferences, scheduled for the six geo-political zones of the Nigeria. The previous four editions of the conference were successfully held in Lagos, Abuja, Enugu and Uyo. Following the enactment of the PRA 2014, the Commission decided to embark on an intensive enlightenment campaign as a platform to educate the public on its new provisions. This Conference was also predicated on the need for ongoing public awareness initiatives about the CPS, in recognition of the inadequate understanding about its lofty features as a reliable pension system. The Theme of this Conference which is, ‘The Pension Reform Act, 2014 – Innovations and Improvements to Nigeria’s Pension Sector’, encapsulates in a nutshell that the implementation of the CPS in Nigeria has achieved a worthy paradigm shift in pensions for the benefit of Nigerian workers.
Distinguished guests, the challenge of instituting effective and sustainable pension systems remains an issue in Nigeria as well as most African countries. However, the Federal Government of Nigeria took a remarkable step in changing the pension landscape through the enactment of the PRA in 2004. The Act provided novel solutions to what appeared then, as intractable challenges of the Old Defined Benefit Scheme. It instituted the Contributory Pension Scheme (CPS) and established PenCom as the regulator of pensions in Nigeria. The quest for delivering better pensions to retirees guided by experiences garnered in the ten years of implementation of the pension reform necessitated the revision of the 2004 Act. After an extensive review, stakeholder consultations and legislative scrutiny, a new Pension Reform Act 2014 was enacted, which came into effect on 1st July 2014. This conference, therefore, commences the sensitization of our major stakeholders in the North-West geopolitical zone on the new provisions contained in the Pension Reform Act 2014.
It is pertinent to note that the Pension Reform Act 2014 re-enacted the fundamental provisions of the repealed PRA 2004, which include inter alia, the establishment of the Contributory Pension Scheme, uniform standards for pension administration as well as the National Pension Commission as the sole regulator and supervisor of pension matters in Nigeria. However, there are new developments introduced by the PRA 2014, such as the upward review of the minimum rate of pension contribution and the sanctions and penalties against infractions of the provisions of the Act. Furthermore, the PRA 2014 has introduced a provision that allows contributors seeking to own their primary homes, to apply part of their Retirement Savings Account (RSA) balances as equity contribution for residential mortgages, subject to the Guidelines issued by the Commission. I am pleased to inform that we are on the verge of concluding these Guidelines having discussed extensively with all stakeholders including experts in the mortgage industry. Once implementation commences, it is our expectation this would facilitate access to home ownership by pension contributors while also bridging the housing deficit in Nigeria.
With enhanced provisions of the PRA 2014, the Commission is intensifying efforts at extending coverage of the CPS to the underserved economic segments such as the Informal Sector, through the Micro Pensions initiative. The North-West Zone is home to many industries especially in textiles and other manufacturing concerns. Recently, the Commission partnered with the National Union of Textile and Garment Workers of Nigeria, Kaduna to host a workshop, as part of sensitization efforts preparatory to the commencement of Micro Pensions. We are working at providing necessary incentives with requisite flexibility in terms of access, as to encourage informal sector works to embrace the Micro Pensions for future economic security.
Distinguished guests, it is noteworthy that many States in the Federation have adopted the Contributory Pension Scheme and are at various stages of its implementation. The PRA 2014 gives additional impetus for participation in the CPS by explicitly prescribing the coverage of States and Local Government employees, in addition to the Federal Public service and private sector. The scorecard for the North-West Zone is somewhat encouraging. Three States in the Zone, including our host Kaduna, have commenced implementation of the CPS. However, there are some implementation milestones that should be attained by respective States. I would therefore like to fervently appeal to all the States and Local Governments in the North-West Zone that are yet to adopt or implement the CPS to immediately comply in order to avail their employees of the numerous benefits of the Scheme, while avoiding huge future pension liabilities. The need for more efficiency in managing finances has never been greater than now, given the lean available public resources. The adoption of CPS by States is one effective tool of managing finances by paying monthly pension contributions into employees’ RSAs as opposed to settling these huge liabilities at the point of retirement, being the case in the Defined Benefit Scheme. In our quest to assist the States in guided implementation, PenCom has established functional offices in the six geo-political zones including Kano for the North-West Zone. These offices have been equipped to provide the required technical assistance to States and Local Governments in their efforts to adopt and implement the CPS. Furthermore, the Commission had recently made a presentation to the National Economic Council (NEC) where we highlighted the numerous benefits that States would be availed under the CPS. Based on the feedback at the presentation, the Commission would also enhance its technical support to the States for speedy compliance.
Distinguished participants, the resource persons for this conference were carefully selected in view of their wealth of experience and background. I am confident that they will bring their expertise to bear in today’s discussions and stimulate a debate amongst participants to ensure a better understanding and smooth implementation of the new legislation. I should emphasize however, that the Commission values constructive feedback that would enable us improve on service delivery, as we diligently implement the PRA 2014. I wish you very fruitful deliberations.
Thank you and God bless.
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