Ebere Nwoji
Despite promises made by the National Pension Commission(PenCom) on the establishment of Minimum Pension Guarantee Fund and the Pension Protection Fund as enshrined in the Pension Reform Act 2014, to ensure that Nigerian workers get retirement benefit at the end of their
working
years, a report by the Commission has revealed that about 93,803
private sector workers retired without benefits.Despite promises made by the National Pension Commission(PenCom) on the establishment of Minimum Pension Guarantee Fund and the Pension Protection Fund as enshrined in the Pension Reform Act 2014, to ensure that Nigerian workers get retirement benefit at the end of their
These category of workers were faced
with this ugly situation because their Retirement Savings Accounts
(RSAs) balances were N550,000 or below and considered insufficient to
procure a programmed withdrawal or annuity.
This was despite assurance by PenCom to establish the Pension Protection Fund to augment the savings of contributors whose contributions fall below N500,000.
This was despite assurance by PenCom to establish the Pension Protection Fund to augment the savings of contributors whose contributions fall below N500,000.
The commission disclosed this in its
fourth quarter 2018 report. The pension industry regulator stated that
in the fourth quarter of 2018, it granted approval for the payment of
N845.36 million to 3,572 retirees, which comprised 188 public (federal
and state) and 3,384 private sector retirees.
PenCom noted that during the period,
103,016 retirees received en-bloc payments totalling N25.80 billion from
inception to the end of the fourth quarter of 2018, which was
considered insufficient to procure a programmed withdrawal or annuity.
According to PenCom, 93,803 private sector workers have so far retired
without pension benefits, while public sector workers were 9,213.
Aside the fact that establishment of the
minimum pension guarantee fund and pension protection funds were
enshrined in the 2014 Pension Reform Act, shortly after the enactment of
the 2014 Act, the commission, had said it would establish the fund for
the benefits of retirees registered with any of the PFAs.
According to PenCom under the leadership
of its former Director General Chinelo Anohu-Amazu, the fund was to be
used to guarantee the minimum monthly pension stipends that retirees
would be getting, just the way workers in both the public and private
sectors were enjoying the minimum wage.
According to the commission, part of the
funds for the minimum guaranteed pension would be obtained through an
annual subvention of one per cent of the total monthly wage bill payable
to employees in the public service of the federation.
The commission had further assured that the fund would also be funded from the annual pension protection levy paid by PenCom and all licensed pension operators at a rate it would determine from time to time.
The commission had further assured that the fund would also be funded from the annual pension protection levy paid by PenCom and all licensed pension operators at a rate it would determine from time to time.
The commission had further said the
pension protection fund would also be funded from income realised from
the investment of the contributed fund and that it would utilise the
pension protection fund for the minimum guaranteed pension for all
Retirement Savings Account holders who had done business with a licenced
Pension Fund Administrator for a minimum number of years to be
specified by the commission.
PenCom had further said the fund would
be used for the payment of compensation to eligible pensioners during
period of financial losses arising from investment activities.
Going by the way the scheme was
structured, PenCom is to make regulations to govern the operations of
the pension protection fund, its management and custody and set
eligibility criteria as well as related matters.
Industry operators said the fund was supposed to work in tandem with
the minimum pension guarantee, but not to enhance every contributor’s
savings.But THISDAY enquiries from industry operators showed that federal government was partly to be blamed due to the inadequate funding of PenCom.
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