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Mark cautions on pension funds investments

By on September 26, 2013

Senate President, David Mark, has asked the National Pension Commission, Pencom, not to invest the N3.50 trillion Contributory Pension Scheme (CPS) in states yet to commence full implementation of the scheme.

This is just as Governor Ibikunle Amosun of Ogun state and his Ekiti Counterpart, Dr. Kayode Fayemi, blamed loss of confidence in CPF by civil servants in their states on alleged atrocities by officials during previous administrations in the state.

Mark, who was represented by the Chairman Senate Committee on Establishment and Pension, Senator Aloysius Etuk, spoke to Vanguard shortly after the commissioning exercise of the third South West Zonal office of Pencom in Lagos.

He said though the Pension Reform Act, PRA 2004 stipulated that the fund was meant to widen the scope of investment, but it should not be invested in states yet to have fully accepted the new scheme.

According to him, “The pension fund is an investible pool of fund and for any state to borrow from the fund to provide developmental infrastructure for its citizens, it must be a state that has fully implement the new scheme. Also, don’t allow any investor to invest in those states that are yet to accept the new contributory pension scheme.”

The senate president lamented that some states had not fully implemented the PRA 2004 but want to benefit through the issuance of bonds and other financial instruments. He appealed to the Federal and State governments to pay pensioners after active workforce. According to him, “this is because they don’t enjoy any benefits except the pension they collect.”

Amosun said that the workers lost confidence in the new scheme when they discovered that the former administration wasn’t remitting its own share in the pool of fund.

He said “The only issue affecting the commencement of the full implementation was that when I assumed office, I met arrears of about N13 billion unremitted. This led to the workers losing confidence in the new scheme. And they demanded that the state cancel the new scheme in the state. Though it has been resolved but it was a big battle for me to convince them.”

On how the government resolved it, the governor said “We amended it to allow those that have about 7 years left to spend in the public service to opt out while those who still have more than such years were registered for the scheme. Also, we have reduced the N13 billion deficits to about N5 billion now. This was because we know the importance of the scheme.” Amosun assured that the state government will “within two years, we would clear all the outstanding arrears. And this will bring the required confidence to the new scheme.”

The governor however appealed to the National Aassembly to hasten the completion of the ongoing amendment of the Pension Reform Act 2004.