Stakeholders meeting between the Pension Fund Operators Association of Nigeria (PenOp) and the National Assembly Members have reviewed the 17 years of Pension Reforms in Nigeria looking at its challenges, gains and opportunities.
The meeting offered the stakeholders opportunity to discuss areas that require improvement in addition to projecting into the future possibilities of the pension industry.
Muhammed K. Ahmad, pioneer director general, National Pension Commission (PENCOM) who gave the keynote address itemised three major reasons why the scheme has been a relative success so far.
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He mentioned the legislators, the labor union and the pension operators, and went further to say that the fact that the scheme is driven by the private sector is the major reason for its sustainability. He said the role of the regulators was to promote a level playing field for all stakeholders which they have done well over the years.
Ahmad added that the Contributory Pension Scheme practiced in Nigeria has inbuilt checks and balances by virtue of the Pension Fund Administrator and Pension Fund Custodian model ensuring that pension assets are free from manipulation.
He commended the regulatory framework which ensures the daily monitoring of funds and continuous regulation of the system. He also urged the industry to move towards greaterself-regulation, adoption of shared servicesin order to reduce costs and a deepening of the scheme to embrace those in the informal sector. He said the operators should not wait in their offices for the informal businesses, but should go and chase this class of clients using innovative means.
After his keynote remark, there was a robust discussion by the legislators, with a number of them asking questions and stating their concerns. These issues ranged from documentation, lack of participation in the states, the need to increase the lumpsum payment, awareness and other such issues. Pertinent answers were given to the legislators concerns by the pension operators, PENCOM or the keynote speaker as appropriate.
By all accounts, the debates were honest, passionate and all geared towards understanding the scheme better and putting across the views of each party to the other, which was the overall aim of the retreat.
The participants came out of the retreat with a resolution to work closely and better with each other to ensure that the Contributory Pension Scheme is protected but also flexible to serve the current and future needs of the contributors and the Nation at large.
The resolutions from the retreat include:
The meeting resolved that public enlightenment is required to drive compliance among state governments to expose them to the benefits of embracing the contributory pension scheme and also educate them on how the regulated financial market leverage pension assets to facilitate infrastructural development.
The joint committees for establishment and public service of the senate and house of representatives committee on pensions along with the National Pension Commission (PENCOM) should set up a task force to engage state governments and come up with innovative ways to help drive compliance by state governments.
The house committee on pension’s subcommittee on amendment of the PRA 2014 should note all point discussed at the retreat, in addition to the submission from other stakeholder and the national pension commission (PENCOM) and work with the senate committee on establishment and public service of the senate and house of representatives committee to expedite work on the amendment of the PRA 2014 within the next 4 month culminating in presenting amended act for the president assent by November 2021.
A satisfaction survey should be commissioned by PenOp but handled by a third party to gauge the level of satisfaction with the scheme.
Pension Fund Operators Association of Nigeria (PenOp) is an independent, non-governmental, non-political and non-profit making body.
PenOp was established to promote the operations of the pension industry, provide for self-regulation and ensure that international best practices relating to the industry are observed by the operators registered in Nigeria. It constitutes of Pension Fund Administrators (PFAs), Pension Fund Custodians (PFCs) and Closed Pension Fund Administrators (CPFAs).
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