Vanguard (Lagos)

10 August 2010

Nigeria: NPC Sues 90 Firms Over Violation of Pension Act

About N14 billion is generated monthly from contributions into the five-year-old pension reform while its total assets hit N1.8 trillion as at end of July 2010, according the to National Pension Commission, NPC.

The commission also disclosed that it was taking legal action against 90 companies for the violation of the Pension Reform Act of 2004, while 1, 246 firms had been issued caution/warning letters.

Director-General of the Commission, Mr. Muhammad Ahmad, who made this known at a workshop organised by PENCOM for Labour, Finance and Insurance correspondents, said over N65 billion had been paid to over 23,000 retirees from the public and private sectors and over N800 million as pension monthly to the retirees.

Speaking as the workshop with the theme "Challenges of the Contributory Pension Scheme: 2010 and Beyond," Ahmad also confirmed that 163,206 employers were making contributions in favour of their employees in line with the pension reform law with 4.431,048 Retirement Saving Accounts, RSAs, opened by workers as at July 2010.

Giving an update on contributory pension scheme the D-G said: "The industry has continued to consolidate as 4.3 million Nigerians had registered on the scheme as at the end of July this year.

"There are currently about 23,000 retirees from the public and private sectors under the contributory pension scheme that have collected over N65 billion as lump sum and are collecting about N800 million as monthly pension. Additionally assets worth N1.8 trillion have been accumulated as at the end of last month."

He also confirmed that the regulatory body has been encouraging Pension Fund Administrators and Custodians in the country to merge on their own terms as against forced mergers and acquisition.

"As one of the hallmarks of the commission's consolidation phases, we are encouraging operators to merge on their own terms and some of them are at various stages of the exercise and we would continue to update you as we go along in the process", he said.

Mr Ahmed said PenCom was currently making efforts to ensure prompt payment of retirement benefits and sustaining a vibrant and sustainable pension industry to the benefit of the Nigerian economy in general.

"Our regulatory and supervisory philosophy is risk-based and consultative, covering all activities of the commission with particular emphasis on issuance of guidelines and regulations; surveillance of licensed operators; compliance and enforcement; supervision of investment of pension funds; and maintenance of a databank on pension matters," he explained.

According to him, efforts a were equally being to mitigate the negative effects of economic meltdown saying the industry was able to weather the storm due to the safety measures put in place by the commission to safeguard retirement savings in the country.

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