Kindly leave a comment and share
Chuks Udo Okonta
Old age poverty has remained a problem successive governments in Nigeria have being battling to solve through several initiatives and programmes which have not yielded much results.
Some of these initiatives put in place by the government are the Contributory Pension Scheme (CPS) and Micro Pension Plan (MPP). These initiatives were designed to ensure people have regular sources of income at old age, having saved some fund during their active days.
Though some gains have been made since the commencements of these initiatives, especially aggregating over N14.42 trillion, with less that 10 million contributors amid over 100 million individuals engaged in productive works in the country.
To ensure more people embrace these initiatives, the National Pension Commission (PenCom) has been engaging different bodies and today November 24, 2022, was the turn of Civil Society Groups, which it held a
sensitization conference with.
The conference with the theme: ‘Enhancing Informal Sector Participation in the Contributory Pension Scheme: The Roles of Civil Society Groups’, PenCom stated provides a great opportunity for it to enlighten and interact with relevant Civil Society Groups in order to elicit better understanding of the Contributory Pension Scheme (CPS) and the Commission’s activities in general.
Director-General of PenCom, Mrs Aisha Dahir-Umar, in her remarks at the event, noted that the
conference, which was the second in the series, has become quite imperative due to the critical roles of the groups as the bridge between government agencies and the public, thus, the need to constantly interact and inform them of recent developments in the pension industry and some of the other laudable transformational initiatives by the Commission.
She submitted that the micro pension plan was conceptualized to expand pension coverage to the informal sector, including small-scale businesses, entertainers, professionals, petty traders, artisans, and entrepreneurs, adding that she is pleased to inform them that members of the Civil Society Groups are also welcome to participate and save for their old age.
“The MPP aims to curb old-age poverty by assisting the participants to contribute while working and build long-term savings to fall back on when they are no longer in active working life.
“Given the peculiarities of the target participants, the Commission is facilitating efforts by the Pension Fund Administrators to provide incentives for the MPP.
“One key incentive that is being worked upon is the provision of health insurance to the Micro Pension contributors. This recognizes the need for the MPP to provide more access to health care services, which is often lacking in critical times of need,” she posited.
She stated that
the strategic efforts to drive the Micro Pension Plan remains one of the important areas of focus of the Commission and that it is the Commission’s expectation that the learning points from the conference would be disseminated to target audience of participants and the larger society, in addition to creating awareness and deepening the understanding of members of the CSGs, the conference should also elicit their participation in the MPP.
She noted that the current Commission’s leadership is focused on transforming the pension sector, adding that some of the recent significant accomplishments by the Commission include the issuance of the Guidelines on Accessing 25 per cent of RSA Balance towards payment of Equity Contribution for Residential Mortgage by RSA holders.
This innovative development, she said provides equity finance for RSA holders, facilitates their ownership of residential homes during their working life and ultimately improves their living standards.
“The Guideline effectively implements the provisions of Section 89(2) of the Pension Reform Act (PRA), 2014 which aligns with one of the Commission’s core value of responsiveness, based on the need to improve the standard of living of active employees and retirees under the CPS,” she said.
She maintained that the commission had also concluded the increase of the Minimum Regulatory Capital (Shareholders’ Fund) requirements of PFAs from N1 billion to N5 billion, stressing that the recapitalisation exercise, which spanned a 12-month period was concluded on 27 April 2022 and that as of the deadline, all PFAs had complied with the Commission’s directive to increase the Minimum Regulatory Capital (Shareholders’ Fund) from N1 billion to N5 billion.
The recapitalisation exercise, she posited was to ramp up the capacity of the PFAs to manage the increasing number of registered contributors and pension fund assets, the value of which she is pleased to state stands at about N14.42 trillion as at 30 September, 2022.
She noted that the exercise is expected to bring about increased effectiveness and efficiency as well as improved service delivery in the industry.
“Further to its regulatory and supervisory functions, the Commission has continued to issue new Guidelines, Frameworks, and Regulations while strengthening existing ones, to make for the smooth implementation of the CPS and the welfare of active employees and pensioners under the Scheme.
“The Commission issued the Revised Regulation on the Administration of Retirement and Terminal Benefits to ensure that pensioners receive their benefits promptly,” she pointed out.
She stressed that the
key highlights of the Revised Regulation include clarifications and simplification of documentation processes, RSA consolidation before payments of retirement benefits, accrued pension benefits for private sector contributors and additional lump sum payments adding that the revised regulation also contains several new provisions on pension enhancement, voluntary contributions, payment under the MPP, payment of benefits of missing persons, and payment of Nigeria Social Insurance Trust Fund (NSITF) benefits.
“Furthermore, it introduced Administrative Sanctions on PFAs who disregard the provisions of the Regulation. The sanctions are to ensure that PFAs promptly process the payment of retirement benefits to retirees,” she added.
expressed the Commission’s immense gratitude to participants for taking time off their busy schedules to participate in this conference.