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PenCom introduces protective measures for CPS

By BusinessNews Staff on June 3, 2014

The Acting Director-General, National Pension Commission, Mrs. Chinelo Anohu-Amazu, has said that the Contributory Pension Scheme has safeguard measures to protect the growing funds.

She said this while making a presentation on the pension scheme as a catalyst for economic development, during the Business Law session of the Nigerian Bar Association in Lagos.

“The Contributory Pension Scheme ensures the separation of the function of management from that of custody of pension assets,” she said.

According to her, the CPS ensures meticulous investment limit and risk rating, daily monitoring of pension fund investment and fit and proper persons requirements for pension funds management.

Anohu-Amazu also said that it would ensure strict corporate governance and disclosure requirement, adding that pension assets could not be used to meet the claim of any creditors or be sold, or granted as loan.

The acting director-general said that under the statutory reserve funds, pension fund administrators were required to set aside 12.5 per cent of their profits after tax to absorb any losses.

While giving figures of pensioners receiving benefits under the CPS as of March 2014, she said that 86,628 retirees were being paid through programmed withdrawal, while there were 9,212 annuitants.

The PenCom boss said that prior to the Pension Reform Act 2004, the public sector operated Defined Benefit Scheme that was largely unfunded or underfunded, marred by weak, inefficient and less transparent administration, unsustainable due to accumulated pension debt.

She added that the private sector was characterised by low coverage and compliance, leaving most workers with no or inadequate retirement benefit arrangement.

Speaking on the role of pension in emerging economy, she said that it would provide social security by alleviating old age poverty, ensure that every pensioner receive pension as and when due and that the CPS stem further growth of pension liabilities because it would be fully funded towards future pension obligations.

Anohu-Amazu noted that the CPS had curtailed the burgeoning pension liabilities of federal and state governments.

According to her, the pension scheme has an efficient avenue for infrastructure and economic development, availability of investible funds to support the development of the real sector, stimulates job creation and creates employment generation, both directly and through third party service providers to the pension industry.

[Punch]

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