‘How Tinubu can help grow pension industry’

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The Nation Newspaper 'How Tinubu can help grow pension industry’

Mrs. Aisha Dahir-Umar, Director General of the National Pension Commission , speaks on the challenges of regulating the multi-trillion naira pension industry, as well as what President Bola Tinubu should do to further growth, in this interview with journalists.

One of our outstanding achievements is the recapitalisation of the shareholders’ fund of Pension Fund Administrators from N1 billion to N5 billion. The significant increase in the number of registered contributors and pension assets under the management of PFAs had necessitated increased capital injection, in order to meet minimum service standards and address various operational needs in the pension industry.

In 2022, PenCom issued the Guidelines on Accessing Retirement Savings Account Balance towards Payment of Equity Contribution for Residential Mortgage by RSA Holders.

Furthermore, employers can consider an upward review of the rate of pension contributions in respect of their employees. Section 4 of the PRA 2014 stipulates a minimum pension contribution of 10% by the employer and 8% by the employee. However, the pension contribution rate can be enhanced through a collective agreement between the employer and the employee as provided under Section 4 of the PRA 2014.

The Non-Interest Fund is a fund that complies with Sharia principles. It has provided an inclusive option for contributors to save for their retirement while respecting their ethical preferences. The reception for the Non-Interest Fund has been positive and PenCom is continually working to expand awareness and access to this option. As at 31 August 2023, the value of the Active Non-Interest Fund and Retiree Non-Interest Fund stood at N42.43 billion and N5.24 billion respectively.

Based on this explanation, I believe it is clear that PenCom does not have custody of pension assets, neither can it access the funds which are held in custody by PFCs. The introduction of the RSA Transfer System is one of the major highlights of your tenure so far. What changes has the industry witnessed as a result?

Exemption of government agencies and personnel from the CPS would imply an additional financial burden on the Federal Government. It is trite that the Federal Government is already overburdened with the payment of pensions under the Defined Benefits Scheme, as illustrated by the 2023 Appropriation Act which made a provision under the Service Wide Vote for the sum of N854.8 billion as total allocation for Pension and Gratuities.

 

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