FG Okays N34b For Pension Payment

The Federal Government has approved an additional N34 billion for the payment of contributory pension, says Mr Muhammad Ahmad, Director General, National Pensions Commission (PENCOM).

Ahmad said this at the 4th Conference for Directors of Pension Operators organised by PENCOM with the theme, “Building a more Efficient and Sustainable Pension Industry in Nigeria.”

“In respect of those under the contributory pension scheme, recently the Federal Government approved additional funding of over N34 billion for those who have not come forward initially to file their claims.

“When they came forward, FG had to look for money and virtually all of them have been paid because funds have been transferred to respective Pension Fund Administrators (PFAs).

“Those that have completed the necessary documentation are being paid and those that have not done that are in the process of doing that,‘’ he said.

He said though the contributory pension scheme was in its eighth year, the industry was still experiencing some challenges because a large number of small companies had yet to join the scheme.

The D-G said that in order to overcome these challenges, PENCOM had appointed some 170 consultants, largely lawyers and accountants, who have, in the last three months, been moving round different parts of the country to ensure compliance.

“We believe that before the end of the year, we may achieve substantial compliance giving the fact that now we have seen an increased number of those who now join the scheme.

“There are also challenges of the fallout from the recent public hearing on the administration of pension occasioned by the lack of understanding of the difference between the Define Benefit and Define Contributory (DC) Schemes, ‘’ he added.

According to him, there are also the challenges associated with the DC scheme such as poor service delivery by pension operators.

Ahmad reminded the operators that they were managing other people’s money and therefore needed to continue to win their confidence.

“Today, we have close to N2.8 trillion (about $18 billon) pension assets, which is a lot of money by all standards and must be sustained.

“It is hoped that this forum would look into these challenges and provide workable solutions towards strengthening the industry and ensuring that the scheme achieves its objectives,” he said.

The Chairman of Pension Operators Association, Mr David Uduano, said the industry had been grown from zero to N2.8 trillion ($18 billion) in assets management.

Uduano said the industry with six million contributors, had done well looking at where it was coming from.

He said, however, the major challenges were timely remittance of pension funds at the end of the month

“The sustenance of the industry is built on the confidence of the result achieved by the industry and that confidence means that more people will come to enrol and therefore, we will have a sizable population within the industry,” he said.