Pension

Pension Sector Under Fire as Complaints Mount to Alarming Levels

Published

7 months ago

September 18, 2023

Despite Nigeria’s pension assets rising to an impressive N17.1 trillion in July, this financial prosperity is shadowed by a growing wave of discontent among pension contributors and retirees due to the mounting backlog of unresolved complaints within the sector.

Contributors and retirees, who shared their grievances, expressed frustration over the sluggish response or complete lack thereof to their complaints. This has sparked concerns that the National Pension Commission (PenCom) might be struggling to cope with the constant influx of grievances.

This unsettling trend is contributing to a growing inclination among various groups and institutions to seek an exit from the Contributory Pension Scheme (CPS) and revert to the old scheme.

Analysis of PenCom’s data, revealing alarming figures. In the first quarter of 2023 (Q1’23), out of 59 complaints related to non-remittance of pension contributions, only nine were resolved, leaving a staggering 84.7% of complaints unaddressed.

The trend continued in previous quarters, with a high percentage of complaints remaining unresolved.

PenCom acknowledges that besides non-remittance of pension contributions, they receive numerous other complaints daily. These encompass issues such as delays in receiving accrued pension rights, requests for resolution of multiple PIN registrations, approval delays for transfers to Retiree Life Annuity (RLA), programmed withdrawal, temporary access 25%, residential mortgage, voluntary contributions, and NSITF, along with delays in data-recapture and RSA transfer-related complaints.

Comrade Bisan Olufemi John, Secretary of the Nigerian Union of Pensioners Contributory Pension Scheme (NUPCPS), emphasized the urgency of enhancing customer service and improving the welfare of pensioners and workers.

He stressed that the government’s ability to address economic challenges hinges on satisfying the needs of both pensioners and current workers.

Malachy Eze, another pension contributor, criticized the pension industry’s slow response to complaints, noting that it negatively impacts the pension scheme.

He called for better opportunities and support for both workers and pensioners, particularly highlighting the issue of group life insurance claims.

Comrade Olagbayo Johnson, a NUPCPS member, expressed disappointment with the Contributory Pension Scheme’s performance, emphasizing the need to address its shortcomings promptly.

As the pension sector thrives, it becomes increasingly imperative to address these pressing concerns and ensure that pensioners and contributors receive the attention and support they deserve. The government’s commitment to prioritizing the welfare of its citizens, both past and present, remains essential for a prosperous economy.

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Pension

Nigeria’s Pension Fund Value Plummets by 29% to $14.39bn Amid Naira Depreciation

Published

1 month ago

March 19, 2024

Samed Olukoya

Nigeria’s pension fund value has declined by 29% to $14.39 billion in January 2024.

This drop attributed primarily to the ongoing depreciation of the naira against the dollar represents a contrast from the $20.41 billion recorded in December 2023.

The latest unaudited report on the pension funds industry portfolio revealed that the conversion rate of the naira to the dollar played a pivotal role in this decline.

In January, the naira was converted at a rate of N1,356.88/$, a significant deviation from the N899.39/$ rate observed in December.

This depreciation trend in the naira has been persistent since June 2023, following adjustments made by the Central Bank of Nigeria.

The continued weakening of the national currency in 2024 further exacerbated the erosion of the pension fund’s value when measured in dollar terms.

While the dollar value of the pension fund experienced a substantial downturn, in naira terms, the total assets under the Contributory Pension Scheme witnessed an increase to N19.53 trillion from N18.36 trillion at the end of 2023.

A significant portion of these assets, estimated at N12.14 trillion, was invested in Federal Government securities, reflecting a strategy to navigate the challenging economic landscape.

Amidst concerns over the impact of naira depreciation on pension funds, stakeholders have emphasized the need for prudent financial management and diversification of investment portfolios to mitigate risks associated with currency fluctuations.

Pension

Pension Fund Administrators Channel N130 Billion into Infrastructure Investments

Published

5 months ago

November 27, 2023

Investors King

Pension Fund Administrators (PFAs) have strategically invested N130.18 billion from the Contributory Pension Scheme into infrastructure projects by the end of September 2023.

The data from the National Pension Commission reveals the commitment of PFAs to diversifying their investment portfolio while maintaining compliance with the Pension Reform Act of 2014.

As of the reporting period, the total assets under the Contributory Pension Scheme amounted to N17.35 trillion.

In addition to infrastructure investments, PFAs directed funds into various avenues, including domestic and foreign ordinary shares, federal and state governments’ securities, and money market instruments.

The investment strategy aligns with the amended investment regulation introduced by the commission.

The regulation outlines stringent requirements to ensure prudent and compliant investment practices in line with the provisions of the Pension Reform Act.

It emphasizes that pension fund custodians should adhere to written instructions from licensed PFAs regarding the investment and management of pension fund assets.

The regulation also sets guidelines for allowable investments outside Nigeria, and PFAs are cautioned against contracting out the custody of pension fund assets to third parties without prior approval.

This strategic approach not only upholds regulatory standards but also serves the long-term interests of contributors, ensuring a balanced and diversified investment portfolio.

Pension

Federal Government Completes N1.02 Billion Payment to Power and Transport Pensioners

Published

6 months ago

November 6, 2023

Investors King

The Federal Government announced the successful disbursement of N1.02 billion to 7,091 pensioners from the Power and Transport Sectors of the Parastatals Pension Department.

This vital step to fulfill pension obligations was revealed by Olugbenga Ajayi, the Head of the Corporate Communications Unit at the Pension Transitional Arrangement Directorate (PTAD), in a statement released on Sunday.

The allocated sum accounts for 39% of the accrued pension arrears owed to retirees in these sectors for the period spanning from August 2015 to September 2023.

The process involved a meticulous calculation of each pensioner’s monthly pension based on their career details, salary structure, and applicable pension increments.

This commendable initiative stemmed from the realization that 7,091 pensioners in the power and transport sector were receiving inadequate pension payments due to discrepancies within the inherited payroll system managed by PTAD.

Dr. Chioma Ejikeme, the Executive Secretary of PTAD, reiterated the government’s commitment to upholding fairness, equity, and justice, ensuring that every pensioner receives their rightful pension under the Defined Benefit Scheme.

Dr. Ejikeme also assured federal pensioners that the payment of accrued pension arrears would continue until all obligations are satisfied, subject to the availability of government funding.

This announcement underscores the government’s unwavering dedication to the welfare of retirees and is a significant milestone in addressing outstanding pension liabilities in the country.