No cause for alarm over management of N8.67trn pension fund – PenCom
The National Pension Commission (PenCom) on Thursday allayed fear over the management of the total assets under its purview, valued at N 8.67 trillion, as at December 2018.
Aisha Dahir-Umar, Acting Director-General of the commission, made the disclosure while fielding questions from journalists shortly after delivering a keynote address at the 2019 First Quarter Consultative Forum For States, held in Akure, the Ondo State capital.
Mrs Dahir-Umar, who was represented by Dan Ndackson, Head, State Operation Department, PenCom, said it became imperative to allay fear of Nigerians as regards the safety of the pension assets.
She said the clarification was also necessary in view of the “misleading narratives in the social and conventional media about the safety of the pension assets.”
She explained one that of the reasons the commission was in Ondo State was to assure Nigerians that their contributory pension was safe.
She said the commission had put measures in place to further guarantee the safety of the fund.
According to him, since the existence of the scheme in the last 14 years, the commission had never been found wanting in managing the fund.
“So, we want to tell Nigerians today that pension fund asset is safe.
“It is true that the federal government has been borrowing from the fund, but I want to assure you that every penny borrowed has been returned.
“If you are conversant with the financial market in Nigeria, you will know that without the pension industry, most of the federal government bonds will not subscribe.
“It is because of the accumulation of these funds that industries survive.
“The scheme has been fueling the weak economy of this country, and without it, Nigeria will not be where it belongs today,” Mrs Dahir-Umar said.
She said since the commencement of the Contributory Pension Scheme (CPS) in the country, it had become a veritable tool for federal and state governments to accessing bonds for development purposes.
She noted that since the inaugural forum in 2014, many state had made tremendous progress towards adopting the CPS in their states.
She added that others had improved their compliance status in the implementation of the scheme.
She pointed out that the essence of the forum was to discuss issues associated with the implementation of contributory pension scheme in states.
“What we are trying to do is to move around the states, particularly the states that have shown interest in the implementation of this scheme and Ondo State has taken meaningful steps on this and that is why we are here,” she said.
However, the Acting D-G expressed dismay on the stagnating compliance of some states as regards the scheme and emphasised that such states risked the benefits therein.
“As at February 2019, the commission observed with concern that the momentum in the adoption of Contributory Pension Scheme (CPS) seems to be stagnating as many of the twenty-six (26) states that had enacted laws on the CPS had substantial compliance challenges with the provisions of their state laws.
“We noted that seven (7) states were either remitting only the employees’ portions of contributions or had huge backlogs of both the employer and employee contributions.
“However, where a state chooses to exercise its constitutional independence and refuses to adopt the CPS in accordance with the guidelines of the commission, the state shall deny itself the benefit of the CPS,” she said.
Mrs Dahir-Umar also reeled out the benefits of the CPS to include, eradication of ghost worker syndrome, cultivation of a savings culture for old age, payment of pension as and when due, creation of a pool of investible funds for development in the economy and greater transparency in pension administration.
While declaring the forum opened, Governor Oluwarotimi Akeredolu said the pension scheme occupied a strategic position in economic development.
He stressed that it was not only an essential component of social security, but also a veritable tool for nation building.
Represented by the State Commissioner for Budget and Economic Planning, Emmanuel Igbasan, the governor said the state had made efforts to ensure full implementation of the CPS.
He added that the state also intended to harness the funds for capital and development projects.