Ms. Omolola Oloworaran, Director-General of the National Pension Commission (PenCom), during her first official engagement with the media since assuming office, spoke on plans to expand the Contributory Pension Scheme (CPS) to encourage states to key into the scheme and other pertinent issues in the sector. She updated participants on significant milestones within the pension industry and shared strategies to address emerging challenges. JOSEPH INOKOTONG, who was there, brings excerpts.
Achievements, challenges of the Contributory Pension Scheme (CPS), what is PenCom doing to encourage States in the country to subscribe?
As of October 2024, the CPS recorded 10.53 million registered contributors and boasts pension fund assets of N21.92 trillion. It is even expected to hit N22 trillion by the end of the year. The growth is part of the commission’s commitment to safeguarding contributors’ savings through prudent management and sustainable growth practices. The numbers you see here reflect our unwavering commitment to fund safety, prudent management, and sustainable growth.
These numbers reflect our unwavering commitment to fund safety, prudent management, and sustainable growth.
However, the economic realities of 2024 and preceding years present unique challenges. High inflation, the devaluation of the Naira, and the lingering effects of unorthodox monetary policies have eroded the real value of pension funds, impacting contributors’ purchasing power.
To address these challenges, PenCom has initiated a comprehensive review of the Investment Regulations, focusing on diversifying pension fund investments into inflation-protected instruments, alternative assets, and foreign-currency-denominated investments. Our goal is to safeguard contributors’ savings and ensure resilience against future economic volatility.
The issue of states not keying into the contributory pension scheme has been on the front burner for a long time. I think only about seven states so far out of 36 states have keyed into the scheme. However, the narrative is gradually changing and I am pleased to announce that Abia State has recently joined the scheme. We plan that in the coming year, we will have more states join as we continue to advocate the importance of joining the scheme.
The critical issue of delay in payment of retirement benefits, especially accrued rights, and how PenCom is addressing the challenge?
Retirees from treasury-funded Ministries, Departments, and Agencies (MDAs) have faced delays since March 2023. However, progress has been made in recent weeks; with the Federal Government disbursing N44 billion under the 2024 budget appropriation to settle accrued pension rights. Moving forward, we have also put in place initiatives that we are collaborating with the Federal Government to implement. We want to institutionalise a sustainable solution, ensuring retirees get their benefits as and when due. The commission is currently seeking approvals for a plan designed to prevent future delays, ensuring that retirees access their benefits promptly. We want to ensure that this sort of delay never happens again. Once you retire, you get your benefits as and when due.
What are PenCom’s plans to expand coverage of the CPS to reach un-served, especially the Micro Pension Plan (MPP)?
Expanding pension coverage remains a top priority for the commission. Our revamped Micro Pension Plan (MPP) leverages technology to incentivize informal sector participation, making it easier for everyday Nigerians to save for retirement. This initiative aligns with our vision of inclusive growth and financial security for all.
We are also addressing delays in retirement benefit payments to retirees of Federal Government treasury-funded MDAs. Recently, N44 billion was released under the 2024 budget appropriations to settle accrued pension rights for retirees from March to September 2023. We are working with the Federal Government to institutionalize a sustainable solution; ensuring retirees receive their benefits promptly and without undue stress.
The theme of this conference, “Tech-Driven Transformation: Shaping the Pension Landscape,” reflects PenCom’s strategic commitment to harnessing technology for enhanced pension administration. By leveraging innovation, we aim to transform service delivery, improve transparency, and drive efficiency across the pension industry.
We achieved a major milestone with the launch of the e-Application Portal for Pension Clearance Certificates (PCC) in October 2024. This initiative replaces the manual process, enabling companies to seamlessly apply for and receive PCCs online. We have so far issued 38,528 PCCs, significantly enhancing the ease of doing business and ensuring compliance.
Additionally, the Pension Industry Shared Service Initiative is in advanced stages of implementation. This initiative will digitize pension contributions and remittances, ensuring seamless processing of Retirement Savings Account contributions and resolving discrepancies caused by incomplete remittance details.
To further enhance contributors’ experiences, we have introduced a revised programmed withdrawal template, simplifying access to voluntary contributions and revising the threshold for en-bloc payments in line with the new minimum wage. These measures are designed to make retirement processes more efficient and user-centric.
The Nigeria Police Force (NPF) consistent clamour to leave the scheme
The police are championing a righteous course, but how they go about fighting a righteous cause should be appropriate. Whilst the course is right, the solution does not lie in exiting the Contributory Pension Scheme (CPS) because what we have seen in the past is mismanagement of funds for police functions in particular. The CPS insulates police funds from mismanagement and ensures that funds are safe and well managed. We will continue to engage in that regard, to ensure that the police stay within the CPS scheme and also engage, perhaps, on how they can get better benefits and remain within the scheme because remaining in the scheme is the best thing for the police themselves and the best thing for Nigeria as a whole.
Plans for Nigerians in the diaspora to contribute to the Scheme
We want to see how we can open up the Contributory Pension Scheme to Nigerians in the diaspora. We are working on the guidelines. I think before the end of the first quarter of next year, we should be able to release some guidelines to guide the contributions of Nigerians in the diaspora.
Commitment to work with the media, architects of public awareness
The Nigerian media has consistently proven to be a vital pillar in nation-building. Your role in informing, educating, and influencing public opinion cannot be overstated. At PenCom, we deeply appreciate the power of your platforms and are committed to strengthening our partnership to ensure the effective dissemination of information about the CPS.
Outlook and shared vision
Integrating technology into every facet of the pension industry is shaping a future where the CPS becomes more accessible, reliable, and sustainable. However, this transformation requires your unwavering support as media practitioners. Your role in amplifying our efforts and enlightening stakeholders across Nigeria is very important. Together, we can ensure that every Nigerian, including the most vulnerable, has access to a secure and dignified retirement. I commend your dedication to enlightening Nigerians about the CPS. Your collaboration is indispensable to our mission of securing the future of millions.
READ ALSO: PenCom announces N44bn for pension payments
