Nigeria’s contributory pension asset tops N4.3 trillion

The PenOp chief commended the PENCOM for developing appropriate laws and regulatory frameworks.

About six million workers in various ministries, departments and agencies, MDAs, currently account for about N4.3 trillion total asset under the Contributory Pension Scheme, CPS, the Pension Operators Association of Nigeria, PenOp said on Tuesday.

The National Chairman of the group, Musbahu Yola, said that the current initiatives by the National Pension Commission, NPC, and other stakeholders to make the CPS succeed was commendable, through there was still a lot more to do to ensure that millions of Nigerian workers not captured are made to enroll in the scheme.

Mr. Yola however, regretted that there was nothing to celebrate in the figures of new members this year.

In spite of about 16 million workers in the country, the chairman said, even with pension’s five per cent contribution to the nation’s Gross Domestic Product, GDP, it was too low and should be raised urgently.

The PenOp chief, however, commended the PENCOM for developing appropriate laws and regulatory frameworks which have the potential of moving the sector forward and boosting the enrolment figures in the nearest future.

He described the planned World Pension Summit Africa as a desirable step towards growing the pension industry in the country, as it would create an avenue for all stakeholders to share experiences on how the industry was being positioned in the various countries’ development agenda, especially in translating its huge socio-economic potentials to national advantage.

“A lot of work has been done in Nigeria, but there is a lot more to be done,” Mr. Yola said. “We have got six million contributors out of a population of 170 million people, perhaps up to 16 million workers. We have only been able to accumulate pension assets to the tune of N4.3 trillion, and that is just roughly $25 billion and about perhaps five per cent of our rebased GDP.”

He acknowledged that a lot more work needs to be done, saying that a lot of credit should go to the NPC for its efforts to bring the industry to where it today.

“I know it takes a lot of work by stakeholders to succeed. I am confident that we will be able to do it”, he added.

The Director General of the PenCom, Chinelo Anohu-Amazu, noted the various initiatives by the Commission to re-position the industry on the path of sustainable growth, promising that within the next few years the CPS’ enrollees would have doubled.

Specifically, she noted that over the past year, the Commission had not only established zonal offices in the nation’s six geo-political zones as part of efforts to create more awareness about the CPS, but has also been engaging the state governments on the imperative of enrolling their workers for the scheme.

Mrs. Anohu-Amazu said the results of the engagement were already manifesting with more and more states passing their pension laws, adding that at the summit states that had done remarkably well would be show-cased just as she urged workers to demand for their enrolment in the scheme as a right and not a privilege.

Agreeing that six million enrollees in a population of about 170 million was significantly low, the PenCom boss however believed that the progress being made to boost the figures was desirable, particularly when it is understood that prior the take-off of the new CPS, Nigeria had accumulated a deficit of N2 trillion in pension arrears and thousands of pensioners were dying while queuing for their pension payments which never came.

In the past decade with the passage of the law in 2004, 2005 was used mostly in setting up the National Pension Commission and then setting out the basis and format for the licensing for the operators with most licensed in 2006.

She said given the lessons from the past, government did not want to rush to get things out just to show that we were moving fast, adding that PENCOM needed to move right and consolidate on the structures, making sure that the rules and regulations ring-fence the pension fund, setting adequate control mechanisms to ensure that everybody who is a PFA today and PFC are fully automated.

“The Summit would focus on the next decade, particularly what we need to do, how we intend then to increase compliance and when the structure is right, compliance come into an established culture.

“That is where we are going and with the aggressive nature of both the Pension Fund Administrators and us, the regulator, I believe these figures can double in no time because like I said, the foundation is right”, Mrs. Anohu-Amazu stated.