Pension Reform: PenCom lists vital areas of interest

The National Pension Commission has listed some viral areas of interest for the Pension Industry in Nigeria.

In a release by the Commission, PenCom listed the following areas of reforms in the Pension Reform Act 2014. They are:

Transfer Window

This will allow Retirement Savings Account (RSA) holders to move from one Pension Fund Administrator (PFA) to another, currently, once you open an RSA with a PFA you can not move to another PFA even if you are not impressed with the performance or customer service of your PFA. PenCom initially planned to open the transfer window is May 2020 but PenCom has now moved it to the end of this year because of the Coronavirus pandemic.

RSA for Mortgage

This will allow RSA holders to use part of the balance in their Retirement Savings Account (RSA) to pay for residential Mortgage, there is even a plan to allow couples to join together to increase the amount they can have access to. RSA for Mortgage will assist a lot of Nigeria to buy their own houses.

Minimum Pension Guarantee MPG will ensure that retirees, irrespective of the balance in their Retirement Savings Account, will have access to a minimum pension. This will ensure we dont have retirees collecting unbelievable small amounts as pension per month.

Appointment of DG & Executive Board of PenCom

The National Pension Commission is currently being managed by the Acting Director General at the helm of affairs. This is not the best for the industry, most especially considering the fact that, Section 19 of the Pension Reform Act 2014 mandates the establishment of a governing Board for the National Pension Commission. The absence of the Board is a contravention of PRA 2014, FG sacked the Director

General and Board members in April 2017, and over 3 years after, we still dont have appointed Board members for PenCom.

Pension should be 1st line charge for FG, State & LG.

Compliance of the Public Service with the Contributory Pension Scheme is not impressive. Federal Government release of accrued rights is delayed by over a year. State governments are slow in implementing the contributory pension scheme and even some who have implemented are characterized with irregular pension contribution and absence of life insurance policies. Its necessary to note that some states are complying, but looking at the states, we have a long way to go. FG and State Governments need to treat pension payments as a Priority.

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