As you are indeed aware, the enactment of the Pension Reform Act (PRA) 2004 was a significant turning point in the quest to bequeath a sustainable and efficient pension system for Nigeria. The main aim was to provide an enduring solution to the protracted challenges associated with pensions in both the public and private sectors…
WELCOME REMARKS BY CHINELO ANOHU-AMAZU, DIRECTOR GENERAL, NATIONAL PENSION COMMISSION AT THE JOURNALISTS’ CONFERENCE ORGANIZED BY THE COMMISSION ON 2 NOVEMBER, 2016 AT THE TRANSCORP HOTEL CALABAR
Distinguished Ladies and Gentlemen
I am honoured to welcome you all distinguished members of the ever vibrant Nigerian Media to the National Pension Commission’s Journalists’ Conference which is being hosted in Calabar. This Conference is part of the Commission’s ongoing enlightenment and public education drive, aimed at increasing the level of awareness on the Contributory Pension Scheme (CPS) and other related pension issues. We commend the notable role which the Nigerian media has been playing in sensitizing the general public on pension matters. We organize these interactions as a platform to equip and update the correspondents with the knowledge of the CPS and also strengthen collaboration between PenCom and the media. I am pleased that you accepted our invitation to attend this important Conference, amidst your busy schedules. Since the previous Conference we conducted in 2012, there have been significant developments in the Nigerian pension reform implementation. These new initiatives would therefore, form the fulcrum of discussions at this conference.
As you are indeed aware, the enactment of the Pension Reform Act (PRA) 2004 was a significant turning point in the quest to bequeath a sustainable and efficient pension system for Nigeria. The main aim was to provide an enduring solution to the protracted challenges associated with pensions in both the public and private sectors. The main highlights of the PRA 2004 included the introduction of the CPS to replace the Old Defined Benefits Scheme and the establishment of PenCom as the sole regulator of pension matters in Nigeria.
We cannot overemphasize that the relative success of the implementation of the PRA 2004 could largely be attributed to the fundamental structures upon which the CPS was built. Indeed, the cardinal principle of separation of custody from management and supervision of pension funds has resulted in a pension scheme with sound internal mechanism for transparency and accountability. Whereas the Pension Fund Administrators (PFAs) manage the pension funds, they do not have access to same, since custody is vested in the Pension Fund Custodians (PFCs), while the Commission ensures both parties adhere strictly to regulations governing the pension funds. Some of the Major success indicators include the consistent growth in a large pool of pension assets of over N5.9 trillion, which are invested in structured and safe financial instruments; registration of 7.2 million pension contributors; 170,000 retirees under the CPS; amongst others.
However, these modest milestones notwithstanding, the implementation of the PRA 2004 was not bereft of challenges. Indeed, some issues were noted in the course of implementation since the PRA 2004 and this underscored the imperative for a comprehensive review of the PRA in order to consolidate on the Pension Reform. The re-enactment of the PRA in July 2014 provided a sound basis to guide the second decade of the Nigerian Pension Reform. The PRA 2014 sought to ensure that more tangible benefits accrue to retirees towards a more blissful retirement. Some of the major developments introduced by the new law include an increase in monthly pension contributions to 18% from the previous 15%, in order to ensure that retirement benefits are enhanced under the CPS for the benefit of contributors; reduction in the waiting period for contributors to access their Retirement Savings Account (RSA) in the event of temporary loss of job from 6 months to 4 months; stiffer penalties and sanctions for infractions; establishment of the Pension Transitional Arrangements Directorate (PTAD) to co-ordinate the smooth administration of the old DB Scheme of the public service; amongst others.
The enactment of the PRA 2014 served as the basis for the implementation of our new Corporate Strategy Plan. Expanding the coverage of the CPS to the underserved economic sectors through our Micro Pension initiative is a key priority of our strategic vision. As we seek to increase registered pension contributors to at least 20 million by the year 2019, informal sector participation through the Micro Pension Plan is expected to provide impetus. The Commission has also enhanced its support to the States in facilitating their adoption and implementation of the CPS by providing a bespoke technical assistance, through our State Operations Department and Zonal Offices in each of the 6 geo-political Zones.
The topics to be covered at this Conference have been carefully designed to provide a clear understanding of all major functional aspects of the CPS. Specific emphasis was given to issues of greater interest to retirees and contributors. The presentations will commence with explanations on the major highlights of the new PRA 2014 and thereafter dwell into specific operational issues including investment of pension funds, the Micro Pension initiative, retirement benefits payment and the role of the media in reporting the pension industry. The ultimate goal is to impart sufficient knowledge about these issues as to enable you educate the public. Therefore, I encourage you to make this conference as interactive as possible by sharing your concerns and seeking clarifications from our team. Furthermore, I wish to assure you that your feedback will be given a deserving attention, in consonance with our consultative approach to regulation.
In concluding, I wish to you all a successful participation at this Conference.
Thank you and God bless.