• Thursday, July 25, 2024
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BusinessDay

Pensioners languish as funds trapped in NSITF

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Five years after the Nigerian Social Insurance Trust Fund (NSITF) was directed, following enactment of the Pension Reform Act 2004, to transfer contributors’ pension savings to their Pension Fund Administrators (PFAs), a huge part of the funds running into billions of naira is still trapped, BusinessDay investigations have revealed.

As a result, some of the contributors, mostly pensioners, still do not have their old balance with the NSITF paid into their Retirement Savings Accounts (RSAs) managed by the PFAs under the current Contributory Pension Scheme(CPS).

Many of the affected retirees who left service, either in the private or public sector, therefore feel abandoned as they are neither receiving their contributions in NSITF nor being given any hope, by their current PFAs, of getting the said funds.

Some industry watchers are of the view that these funds and assets could be in the coffers of some body or agency, which probably is taking pleasure earning interest on the money that belongs to pensioners who are largely living in penury.

For instance, Irene Peter Atolo, a customer of NSITF, who retired after 40 years in service with different establishments and had made his contributions right from the era of Nigerian Provident Fund (NPF) to Nigerian Social Insurance Trust Fund (NSITF), is feeling abandoned and neglected.

Atolo had hoped that his contribution to NSITF would have enabled him to enjoy retirement, but is shocked with current developments as his later fund manager, Leadway Pensure Limited, was yet to get a clue from NSITF as to the whereabouts of his many years’ contribution.

“I started my career in Pharchem Industry Limited on February 1, 1973 and one of my schedules of duty was the monthly remittance of deductions from staff to the National Providence Fund (NPF), then in Ikeja. Later, I got a job as a senior costing/accounts clerk in Guthrie Nigeria Limited and continued my contributions, and finally retired as a financial director in an insurance company in February 2013,” Atolo said.

“Before my final departure from office, I completed all the formalities as regards my contribution to the NSITF through my Pension Fund Administrator (PFA), Leadway Pensure. Since then, all I am told on enquiries to my PFA for my contributions has been, ‘We are yet to hear from NSITF’,” he lamented.

Section 42 (3) of the Pension Reform Act 2004 stipulates that any contributor or beneficiary under the NSITF Act shall, at least five years after the commencement of the Act, select the Pension Fund Administrator of his choice for the management of the pension funds to his credit.

In view of this, the National Pension Commission (PenCom) designed a form that is used to apply for the balances under the NPF/NSITF schemes to be transferred to the beneficiaries’ RSAs.

A document accessed by BusinessDay from PenCom reveals that as at the end of September 2013, the industry regulator reviewed and approved the transfer of N8.11 billion out of the N64.61 billion assets of the NSITF for 107,695 contributors.

In addition, the commission granted to Trustfund Pensions plc, initial managers of NSITF legacy fund, to transfer the sum of N1.27 billion into the RSAs of 17,483 members who contributed to the former NPF/NSITF pension scheme, while total pension payments of N5.53 billion had been paid in respect of 6,426 pensioners of NSITF as at September 2013.

Attempts to reach the NSITF management to comment on the issue proved abortive as the managing director, Umar Abubakar, neither picked his calls nor replied to text messages sent to him by our correspondent.

 

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