OPINION: How Aisha Dahir-Umar Is Transforming PENCOM, By Henry Iheanacho
A few years ago, anyone about to retire, especially from the public sector had loads of reasons to be apprehensive. Gratuities were not paid at the right time and there was no reliable pension plan to fall back on. And to compound the problem, no federal government agency was available to prepare the potential retirees adequately for life in retirement.
To solve these problems, the National Pension Commission (PENCOM) was established to regulate, supervise and ensure the effective administration of pension matters in Nigeria.
The commission has transformed the pension fund industry into one of the strongest sectors of the Nigerian economy. The roller coastal drive gathered further momentum with the coming in of Aisha Dahir-Umar as Director General (DG) in April 2017 following the removal of the former DG, Chinelo Anohu-Amazu.
Under the leadership of Aisha Dahir-Umar, some of PENCOMs achievements and upcoming programmes are so diverse and profound that it is impossible for the commission not to stand out.
In order to enhance the monthly pension benefits of retirees under the Contributory Pension Scheme, CPS, the commission initiated the pension enhancement for retirees under the programme withdrawal arrangement which was largely due to the high returns being generated by the Pension Fund Administrators. This has led to an increase in monthly pensions for over 60% of retirees under the Programmed Withdrawal arrangement.
This is also as the Pension Fund Administrators (PFA) commenced the enhancement of pensions for eligible retirees with effect from December 2017 - A big win for PENCOM.
The Contributory Pension Scheme (CPS) initiative has facilitated a pool of pension funds, accumulating revenues to the tune of over N8.23tn as of June 2018. A total of 280,454 retirees are receiving pension under the CPS as at March 2018. It is noteworthy that the federal government has been consistent in the remittance of the monthly contributions of its employees.
in order to enhance the monthly pension benefits of retirees under the CPS, that the commission initiated the pension enhancement for retirees under the program withdrawal arrangement. This was a result of the high returns being generated by the Pension Fund Administrators (PFAs) on the balances of the Retirement Savings Accounts (RSAs) of a majority of retirees.
Consequently, the monthly pensions for over 60% of retirees receiving pension under the Programmed Withdrawal arrangement was increased. Accordingly, the PFAs commenced the enhancement of pensions of eligible retirees with effect from December 2017.
The implementation of the pension enhancement was one of the significant milestones attained since the commencement of the CPS. It confirms that the CPS has workable internal mechanisms to respond to legitimate demands of retirees as they seek a reasonable retirement income.
As part of efforts to bring in the informal sector into the Contributory Pension Scheme, the President launched the Micro Pension Plan (MPP) in March 2019. Micro pension is a financial arrangement for pension services for self-employed persons and persons working in organizations with less than three employees.
The operators have started registering contributors. Being a new initiative, the commission and the operators are also ensuring that all hands are on deck with a view to sensitizing the public on the MPP and its benefits.
Added to the MPP is the multi-fund structure for retirement savings accounts. The multi-fund structure seeks to align a contributor’s risk tolerance or appetite with his or her investment return expectations, based on work life cycle. Thus, the RSA Fund was being subdivided into four funds to cater for the different age groups of contributors.
To show how effective PENCOM has been in the execution of its functions under its current DG, the pension industry membership has grown to 8.61 million contributors as of April 2019. Also, The scheme has accumulated up to N9.03 trillion as at the end of the first quarter, 2019.
The National Pension Commission (PenCom) organized a nationwide 2019 Pre-Retirement Workshop. The Workshop which from 17 to 25 June 2019., was aimed at educating prospective retirees on the processes of accessing their benefits after retirement.
PENCOM has been an epitome of service delivery to the point that it was awarded the Outstanding Regulator of the Year 2018 by the Independent Newspapers Limited.