Whatever needs to be done to hasten the conclusion of the Amendment of the Pension Reform Act 2004 before the distractions of 2015 general election would go a long way to stabilise the nation’s pension sector for sustainability. Consequently too, it will enhance contributor confidence and bridge the gap between the old scheme and the new scheme for enhanced confidence and image, analysts have said.
Though currently with the with the joint committee of the National Assembly it has strong provisions that would help refocus the old pension scheme called Defined Benefit Scheme (ODBS) for better supervision and management by the nation’s pension regulator, the National Pension Commission (PenCom).
The fears are largely that if this was not concluded before the elections, it’s most likely that the anticipated benefits would not come soon or could even not come when a new legislative assembly comes on board.
“We would be denying Nigerian pensioners who have suffered undue hardship and mismanaged pensions the opportunity this reform is intended to usher in through PTAD,” one of the analysts noted.
Chinelo Anohu-Amazu, acting director general of PenCom, had said at the public presentation on Amendment of the Pension Act 2004 in Abuja that the Commission was determined to refocus the supervision of the Old Defined Benefit Scheme of the public service with a view to stemming the tide of inefficiencies identified.
This, the PenCom boss stated, will be carried out through the Pension Transitional Arrangement Department (PTAD).
The Commission, through PTAD, would undertake an up-to-date verification and documentation of all the retirees and pensioners in the old scheme, and structure a process through which the pensioners would be paid directly through their accounts by the Accountant General of the Federation.
These, analysts say, would remove all intermediaries including management companies as well as the board of trustees, who have been identified as the conduit pipes through which mismanagement and fraud were taking place.
The strength of the Contributory Pension Scheme (CPS) being overseen by PenCom is the cardinal principle of separation of custody of funds from management and supervision, which has resulted in a pension scheme with sound internal mechanism for transparency and accountability.
“Whereas the Pension Fund Administrators manage the funds, they do not have access to same, as custody is vested in the Pension Fund Custodians (PFCs) and the Commission ensures both parties adhere strictly to regulations governing the funds,” Anohu-Amazu stated.
“This ring fencing of Pension Fund Asset and regulatory non-interference,” the Acting Director General noted, “has resulted in the consistent growth in a large pool of pension Assets of N3.8 trillion which are invested in structured and safe financial instruments.”
By: Modestus Anaesoronye