10 November 2012

Nigeria: Pension Fund Hits N2.9 Trillion, May Surpass FG Budget By December

After just eight years, Nigeria's pension fund is already N2.9 trillion richer and before the year runs out, the fund could be in the region of N3 trillion.

The Director, Inspectorate Division of the National Pension Commission, Dr. Musa Ibrahim revealed this Friday in Calabar, Cross River State during a meeting with all managing directors and chief executive officers of licensed pension operators in Nigeria.

Ibrahim said, "right from 2004 to 2012, Nigeria's pension fund had grown steadily and could soon surpass the 2011 federal budget of N4.9 trillion."

He said that in the next five years the pension scheme would build up more funds and the enormous resources being saved "are not supposed to cater for only retirement benefits of pensioners, but also boost the real sector of the economy."

Going down memory lane, Ibrahim said the new pension scheme came into effect due to the myriad of problems relating to the payment of pension in the country and as a result, a contributory pension scheme was set up by the federal government "where every worker will have a retirement savings account and contributions of both the employer and the worker are paid into it on a monthly basis."

He said prior to this, there were problems relating to payment of pensions in Nigeria, "with all sorts of allegations in terms of fraud, misappropriation and non- payment" and that for so many years, pensioners were suffering.

He continued: "In 2004, the federal government was bold enough to say 'lets draw a line and stop this because once you give money to people to be distributing to other people who are old, then you have a problem.'

That was why the federal government had to set up a contributory pension scheme where every worker will open his own retirement savings account and the contributions of the employer and that of the worker will be paid on monthly basis."

The Director- General of Pencom, Mohammed K Ahmed in his speech at the ceremony said the strategic meeting between the commission and heads of licensed pension operators became necessary to take stock of what the contributory pension scheme had achieved over its eight years of implementation and strategize further for better performance.

According to him, the forum is sequel to the recent recapitalisation by pension fund administrators as well as the public hearing on the administration of pensions by the National Assembly joint committee.

"The retreat is also aimed at generating enhanced understanding of the industry, to prioritise the issues affecting the industry and to provide workable sustainable solutions to the challenges", said the Pencom director general.

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