Minimum Pension: PenCom Levies Operators 3%

• Minimum Pension: PenCom Levies Operators 3%

The National Pension Commission has ordered the Pension Fund Administrators to pay three per cent of their management fees into the pension protection fund.

This, it was learnt, would aid the implementation of minimum pension for retirees under the Contributory Pension Scheme.

Some of the operators, who disclosed this to our correspondent, said that the three per cent levy was however based on their 2015 financial records since most of them had yet to submit their 2016 accounts.

According to them, the commission has ordered them to commence the payment of the levy this year in order to accumulate funds to start the payment of the minimum pension to qualified retirees.

Some of the operators, however, said they complained that the three per cent levy was on the high side during a meeting with the commission and pleaded with the regulator to reduce it.

It was gathered that PenCom insisted that the operators must pay the stipulated amount as it was yet to get the funds needed to commence the payment of the minimum pensions to the retirees.

Speaking recently on the funding of the pension protection fund, the Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, said Section 82(1) of the Pension Reform Act 2014 provided for the establishment of the fund.

This, she added, would be utilised for the funding of the minimum pension guarantee for all Retirement Savings Account holders that had contributed for a number of years to a licensed PFA.

She also said the law stipulated that it should be used for the payment of compensation to eligible pensioners for any shortfall or financial loss arising from investment activities.

“The sources of funding of the PPF include an annual subvention of one per cent of the total monthly wage bill payable to employees in the public service of the federation, which shall be utilised strictly for the funding of the minimum pension guarantee,” she said.

The Pension Reform Act 2014 provided that PenCom should establish and maintain a fund to be known as the pension protection fund in respect of the guarantee minimum pension.

According to the Act, funding of the minimum guaranteed pension will be partly obtained from an annual subvention of one per cent of the total monthly wage bill payable to employees in the public service of the federation and returns from pension fund investments.

It will also be funded from the annual pension protection levy paid by PenCom and all licensed pension operators at a rate to be determined by the commission from time to time.