All Posts in "Pension"

Why 14 PFAs Are Still Jostling To Meet N5bn Recapitalisation

By Favour Nnabugwu

 

Barely eight months into the pension industry recapitalisation announced by the National Pension Commission (PenCom), no fewer than 14 out of 22 pension fund administrators (PFAs) are yet to pull a string from their former capital position.

Recall that PenCom had in April 2021 announced a capital increase for PFAs from N1billion to N5billion, a development that was applauded by industry watchers who said the increase was long overdue.

They are having upto June 30 2022 to recapitalize, but virtually eight months into the exercise, five PFAs are still at the bottom of the ladder with little above the current status of N1billion.

On the list are AIICO Pension Fund Managers Limited, N1.76 billion; OAK Pension Limited, N1.73 billion; AXA Mansard Pension, now Tangerine Pension Limited, N1.70 billion; Veritas Glanvill Pension Limited, N1.53 billion; IEI Anchor Pension Managers Limited, N1.37 billion; Investment One Pension Managers Limited, N1.26 billion and Radix Pension Managers Limited, N985.68 million; APT Pension Fund Managers Limited, N2.68 billion.

However, Stanbic IBTC Pension Managers Limited and Trustfund Pension Plc take the lead with N64.45 billion and N12.49 billion shareholders’ fund according to their respective 2020 financial reports.

Also on the lead category are ARM Pension Managers Limited with N9.04 billion shareholders’ fund; NPF Pension Limited, N8.01 billion; First Guarantee Pension Limited, N7.25 billion and Leadway Pension Limited, N7.06 billion.

While Premium Pension Limited has N5.31 billion; Crusader Sterling Pension Limited, N4.67 billion; Sigma Pension Limited, N4.34 billion; Pension Alliance Limited, N4.29 billion; FCMB Pension Limited, N3.48 billion; Fidelity Pension Managers Limited, N3.44 billion and NLPC Pension Fund Administrators Limited, N3.23 billion are below the N5billion capital requirement.

Those at the lower level of the exercise include APT Pension Fund Managers Limited, N2.68 billion; AIICO Pension Fund OAK Pension Limited, N1.73 bilManagers Limited, N1.76 billion; lion; AXA Mansard Pension, now Tangerine Pension Limited, N1.70 billion; Veritas Glanvill Pension Limited, N1.53 billion; IEI Anchor Pension Managers Limited, N1.37 billion; Investment One Pension Managers Limited, N1.26 billion and Radix Pension Managers Limited, N985.68 million.

The increase of the shareholders’ fund of PFAs from N1 billion to N5 billion, according to PenCom was aimed at boosting PFAs capacity in terms of operational efficiency and service delivery.

PenCom in a circular entitled: Revised Minimum Share Requirement for Licensed Pension Fund Administrators (PFAs), dated April 29, 2021 and sent to Managing Directors/Chief Executive Officers of all licensed pension fund operators, said: “The increase in the minimum regulatory capital is necessitated by the need to improve the capacity of PFAs, in terms of operational efficiency and effectiveness as well as service delivery.”

Patoma Admin by — November 18, 2021 in Pension 0
Pension fund assets tops N13 trillion in September 2021

By Favour Nnabugwu

 

The Nigerian pension fund industry hit another milestone in September as its total asset value hit and surpassed the N13 trillion mark for the first time. This is according to the unaudited report on the pension fund industry for September 2021, published by PENCOM.

As pension and retirement funds all over the world continue to grow, Nigeria is also not being left out. This is evident by the 5.6% year-to-date increase recorded in the net assets of the industry. According to data from the National Pension Commission, total pension fund assets in Nigeria grew to N13.001 trillion ($31.69 billion) as of September 2021.

Similarly, the number of RSA registrations also increased to 9.46 million in September from 9.43 million as of the previous month. Also, between January and September 2021, a total of 245,385 new RSA registrations was recorded.

  • As of 30th September 2021, a sum of N8.22 trillion has been invested in FGN securities, representing 63.2% of the total net assets.
  • On the other hand, 17.6% of the funds were invested into local money market instruments at N2.29 trillion.
  • A total of N968.26 billion was invested in corporate debt securities as of the review period, which accounts for 7.4% of the total fund. Investments in corporate debt securities also increased by N131.93 billion on a year-to-date basis.
  • Investments in mutual funds dropped by 27.6% year-to-date to stand at N116.84 billion, whilst accounting for the least quota in their investment portfolio.

Compared with the previous month, pension fund assets increased by N100.57 billion from N12.9 trillion. The increase is attributable to increased contributions from retirement savings account holders, better investment performance and an increase in the number of people that registered into various retirement savings accounts.

The increase could also be attributed to the creativity of the Pension Commission, whose effort to come up with a Sharia-compliant pension fund, Fund VI, added N7.8 billion to the total assets of pension funds in Nigeria. The growth of pension fund assets has been in the ascendency in Nigeria as indicated in the chart below.

The RSA fund II category increased by N315.12 billion between January and September 2021, representing a 5.88% increase from N5.36 trillion recorded as of December 2020 to N5.67 trillion as of the end of September 2021.

RSA fund II, which is the default fund for active contributors who are 49 years and below accounted for the lion share of the fund, which is 43.6% of the total net assets.

RSA fund III followed with N3.43 trillion, representing 26.4% of the total, while CPFAs accounted for 11.5% of the total net assets at N1.49 trillion.

It is worth noting that RSA fund II is a balanced fund with the intention of capital preservation while pursuing fair returns in the long term. About 10% to 55% of the pension funds can be invested in variable income instruments. Although it is typically a default fund for contributors aged 49 and below, they can also opt to switch to Fund I based on their request

Notably, assets in Fund I totalled N45.14 billion, Fund II assets were N5.67 trillion, Fund III assets stood at N3.4 trillion while the assets in Fund IV totalled N1.05 trillion. Newcomers, Funds V or micro pension fund and Fund VI, Sharia Compliant pension fund had asset totals of N196.9 million and N7.8 billion respectively.

Though the growth in pension assets is a giant stride in Nigeria, it is a far cry from what obtains in the United States of America. As at the end of the second quarter of 2021, Retirement Assets in the US totalled $37.2 trillion, according to data from the Investment Company Institute. That represents a 4.8% increase when compared with the ending balance as at the first quarter of 2021.

The huge disparity in the retirement assets in Nigeria and the US is not surprising given the level of financial literacy in the US versus Nigeria, and the high level of awareness being created in the United States on the importance of retirement savings.

In addition to all that, the US has a series of tax policies aimed at incentivizing the citizenry to save for their retirement. According to the same data, retirement assets account for 33% of all household financial assets in the US as at the end of June 2021.

The Nigerian pension industry continues to wax stronger with improved competition amongst the 22 players in the industry. However, due to the conservative investments of the PFAs they often post only single-digit returns.

A recent analysis carried out by Nairalytics showed that the best performing PFAs in the country between January and September 2021, printed single-digit ROI in the period. Specifically, ARM Stanbic IBTC, Veritas Glavills and ARM Pension topped the list with 6.79%, 6.29%, and 6.02% year-to-date ROI respectively.

 

Patoma Admin by — November 18, 2021 in Pension 0
14 PFAs gearing up to complete N5bn recapitalisation

By Favour Nnabugwu

 

Fourteen Pension Fund Administration are on the verge of completing the recapitalisation from N1billion to N5billion as stipulated by the National Pension Commisdion.

Only 8 out of the 22 Pension Fund Administrators (PFAs) in the country have recapitalized from to N5 billion

PenOp’s Chief Executive Officer, Oguche Agudah, who made this known at a virtual event tagged: ‘Beyond Capital – A Recapitalisation Strategy Workshop for Pension Operators’ organised by PenOp.

Agudah as saying that the operators have been working assiduously to comply with the recapitalisation mandate issued by PenCom in April this year.

Oguche Agudah, CEO, PenOp
He expressed optimism that other operators would meet the mandate before the deadline issued by PenCom.

Agudah stated that the recapitalisation would help strengthen the industry’s operators, adding that PenOp’s corporate strategy would have been met, when the PFAs achieve their set target.

PenCom said it increased the shareholders’ fund of PFAs from N1 billion to N5 billion to boost their capacity in terms of operational efficiency and service delivery.
PenCom stated this in a circular entitled: Revised Minimum Share Requirement for Licensed Pension Fund Administrators (PFAs), dated April 29, 2021 and sent to managing directors/chief executive officers of all licensed pension fund operators.

“The increase in the minimum regulatory capital is necessitated by the need to improve the capacity of PFAs, in terms of operational efficiency and effectiveness as well as service delivery,” PenCom stated.

The pension sector regulator noted that its board also approved a 12-month transition period, effective April 27, 2021, within which PFAs are to meet the new minimum capital.

“The board of the commission at its 48th meeting on April 27, 2021 approved the increase of the minimum regulatory capital (shareholders’ fund) requirement for PFAs from the current N1billion to N5 billion, unimpaired losses,” it said.

Patoma Admin by — November 15, 2021 in Pension 0
C’ River: Retirees block Ayade’s office over unpaid Pension, 8 years Gratuity

By Favour Nnabugwu

 

Retirees in Cross River state today blocked the governor’s office to protest their unpaid Pension and eight years Gratuity .

The pensioners who prevented vehicular movement into the governor’s office said they were tired of hearing stories everytime they asked for their entitlement.

Speaking with Vanguard , Chairman of Nigerian Union of Pensioners,NUP, Calabar branch ,Dr Eyo Eyo said it was quite unfortunate the way retirees were being treated since July 2013 .

His words :” It will interest you to know that many of us have not received our gratuity as far back as July 2013 .

“Many of us were last paid pension in 2020 , while some 99 percent of us are being owed since September ,we don’t understand the logic behind selective payment of pension and gratuity .

“Interestingly , many of the pensioners collect as low as 4,000 ,some get 7,500 while others get a little above 15,000 to 20000 which is amongst the highest ,why are they still being owed .

“We have appealed severally to government and at this point ,we are tired of writing ,they are claiming that the governor is not aware of our plight ,well we have brought ourselves to his door post ,we need money for upkeep ,many have died ,countless are bedridden are are dying daily .

” We are in a sorry situation,look at one of us in the floor ,he just collapsed , because he last had a good meal on Thursday morning , we have written countless letters to the governor through Organised Labour ,we decided to come on our own ,to make our position known today.

“We are aware that the governor is having a meeting at the State House of Assembly with some important visitors including governors,Minister but we rather wait at the office for him because we respect him so much ,” he said.

A retiree ,Etinyin Francis Henshaw who said their condition has become appalling adding that the governor does not have regards for old people as well as senior citizens .

“Many of the people I retired with are either dead or bedridden ,I’m greatful to be alive and healthy, the way we are being treated is so unfair , we can no longer bear it anymore,”he said .

Addressing the retirees , Permanent Secretary , Governor’s Office( Special Duties), Dr Alfred Mboto said it was unfortunate that the situation has degenerated like this .

Mboto said : “I came and saw you my mothers and my fathers. Truly speaking I know that you had wanted to see the the Governor directly, but right now as we speak, he is in a meeting at the house of Assembly.

“Truly I have seen your plight, and I can say that No body will see this and not understand that you are in pain. But I am assuring you that we will do everything possible to address your demands. The issue of pension affects all of us, I have how many years now, and I will join you people.

“And so, anybody who is this way and is not supporting the payment of retirees entitlements, I do not think that person is reasonable.The Truth is that government is doing everything possible to make sure that the pension and gratuities are paid,” Mboto said.

Meanwhile ,one of the retirees who slumped during the protest could not be revived ,he was however rushed to the hospital by Permanent Secretary ,Dr Alfred Mboto for further treatment.

Findings show that the present money owed pensioners in gratuity currently stands at 47billion naira which includes pensioners at both Local Government and State Civil Service .

Further findings also revealed that over 70 percent of the workforce in Cross River would be retiring in 2023 which further deepens the debt burden of the retirees .

In a related development ,Organised Labour has vowed to make sure workers remain at home until government begins implementation of all that will be agreed on by both parties ( Government & Organized Labour) as the strike enters day 24.

Patoma Admin by — November 5, 2021 in Pension 0
31 employers pay N154.61m fine for non-remittance of pension

By Favour Nnabugwu

 

 

Thirty-one employers who failed to remit pension contributions deducted from their workers’ salaries to the appropriate Pension Fund Administrators (PFA) have been mandated to pay a total fine of N154.61 million

According to the Q2 2021 report released by the National Pension Commission (PenCom) represents part of the total N398.006 million recovered from them.

A total of N243.396 million representing the principal contributions was also recovered from the defaulters.

The report also disclosed that 19 other defaulting employers had been recommended for appropriate legal action.

While the defaulters were penalised over the infractions, the commission received 10,700 applications from private sector organisations for Pension Clearance Certificates (PCCs) to further qualify them for Federal Governent contracts.

According to the report, “out of this number, PCCs were issued to 10,417 organisations, while 283 applications were in the approval process as at June 30, 2021.

“The records showed that 10,417 organisations had remitted a total sum of N38.371 billion into the Retirement Savings Accounts of their employees totaling 127,483.

On refund of pension contributions to military personnel and employees of state security agencies, the report noted that during the quarter under review, the commission granted approval for the refund of N6.708 million to 57 personnel of the military and other security agencies, who were exempted from the Contributory Pension Scheme (CPS).

An update on the Nigeria Social Insurance Trust Fund (NSITF) also revealed that the commission received applications for transfer of NSITF contributions on behalf of 332 NSITF contributors.

“Approval was granted to transfer N17.026 million to the Retirement Savings Accounts (RSAs) of 298 members. “On a similar note, the commission approved monthly pensions in the sum of N62.327 to 3,629 NSITF pensioners,” the report noted.

 

Patoma Admin by — November 2, 2021 in Pension 0
PenCom shifts retirees enrolment deadline to December 31

By Favour Nnabugwu

 

National Pension Commission (PenCom) has extended the deadline for the online enrolment and verification exercise for retirees/ prospective retirees of Treasury Funded Federal Government Department and Agencies (MDAs) from October 29 to December 31, 2021.

The enrolment also include for those who retired from January to October 2021

National Pension Commission (PenCom) had developed an online application that automated the Annual Pre-Retirement Verification and Enrolment Exercise for retirees/prospective retirees of Treasury Funded Federal Government Ministry Department and Agencies (MDAs).

The online enrolment application went live on 1st September 2021 and Retirees and prospective Retirees were given a deadline of 29th October 2021 to conclude the enrolment process.

“This is to inform all Retirees and prospective Retirees that the Commission has extended the timeline for the online enrolment exercise from 29th October 2021 to 31st December 2021 in order to ensure that all eligible persons complete the enrolment process,” PenCom stated in a statement today.

Persons Eligible to Participate in the 2021 Online Enrolment, according to PenCom are employees of Federal Government Treasury-Funded MDAs including employees who retired from January to October 2021; employees who are due to retire from November to December 2021; and retirees that missed the previous enrolment exercises from 2007 to 2019.

The portal provided Self-Assisted Registration for the affected retirees/ prospective retirees and they are required to visit PenCom’s website www.pencom.gov.ng to initiate the online enrolment process by registering and capturing their employment details as well as uploading scanned copies of the required documents before proceeding to their respective Pension Fund Administrator (PFA) for the physical verification and enrolment.

Retirees/prospective retirees who are unable to complete the online registration could approach the Pension Desk Officer (PDO)/PFA-Assisted Registration of their respective MDAs or visit their PFAs for assistance

Patoma Admin by — October 30, 2021 in Pension 0
PTAD pays N7bn to 24,000 pensioners in computation exercisr

By Favour Nnabugwu

 

The Pension Transitional Arrangement Directorate (PTAD) has reviewed, re-computed and paid over N7 billion to 24,000 pensioners in the ongoing computation exercise.

Executive secretary of PTAD, Dr. Chioma Ejikeme, at a meeting in Kwara for pensioners in the north central region.

Reeling out the achievements of the agency, Ejikeme said: “In 2020, I also approved the commencement of an expanded re-validation and re-computation exercise in a bid to on-board verified pensioners not on payroll, cleared all outstanding pension arrears and resolved all complaints of short payments and outstanding gratuities for the civil service pensioners and their next of kin (NoK).

“Over 21,000 unverified pensioners were dropped from the payroll in October 2020. So far over 2500 of the October drops have been verified, restored to the payroll with the attendant arrears paid.

“The on boarding of verified and not on payroll is ongoing.

Some of the accrued and inherited arrears paid by the directorate include: cleared the 33 per cent increment arrears owed pensioners in the parastatals pension department in December 2019.

Following the increment made to salaries of some federal government employees in 2019 as a result of the review of the national minimum wage, a committee was set up by the National Salaries, Income and Wages Commission (NSIWC) to review the pension and come up with an appropriate and realistic measure to increase the amount paid as pension to pensioners under the defined benefit scheme.

The directorate also has gotten the receipt of the repatriated sum of £26.5 million hitherto domiciled outside the shores of Nigeria.”

She said that the funds were under investment with Crown Agents Investment Management Limited, United Kingdom

Patoma Admin by — October 27, 2021 in Pension 0
CPS records marginal growth of 0.89% in Q2 2021

By Favour Nnabugwu

 

 

National Pension Commission (PenCom) said that the pension industry recorded a marginal growth of 0.89 per cent (83,146) in Contributive Pension Schemes membership in the Q2 2021, rises to 9.44 million in Q2: 2021 from 9.36 million members at the end of Q1: 2021

The regulator disclosed this in second quarter 2021 reports adds that the growth in the industry membership was driven solely by the RSA Scheme, with an increase of 83,146 registered contributors, while noting that Membership of the Closed Pension Fund Administrator (CPFA) Schemes and Approved Existing Schemes (AES) remained unchanged as at Q2: 2021.

It submitted that the total pension contributions remitted to individual RSAs in Q2: 2021 stood at N195.08 billion, of the total, the public sector accounted for N97.17 billion or 49.81 per cent, while the private sector contributed N97.91 billion or 50.19 per cent.

The cumulative pension contributions from inception to the end of the second quarter of 2021 amounted to N7.10 trillion, which is an increase from N6.70 trillion as at the end of Q1: 2021.

PenCom revealed that 19 defaulting employers have been recommended for appropriate legal action over their failure to contribute and remit pension funds for their workers.

It explained that following the issuance of demand notices to defaulting employers whose pension liabilities were established by the Recovery Agents (RAs), the sum of N398,006,984.46 representing principal contribution (N243,396,311.27) and penalty (N154,610,673.19) were recovered from 31 defaulting employers during the quarter under review.

Patoma Admin by — October 27, 2021 in Pension 0
Pension operators navigate better health wellness as PenOps enlightens industry

By Favour Nnabugwu

 

 

Pension Fund operators Association of Nigeria (PenOp) hosted participants across the pension industry on a mental health awareness webinar to mark the World Mental Health Day

The workplace, where people spend most of their time also contributes to pressures that result in increased mental health challenges.l

PenOps leveraged on its monthly knowledge sharing sessions as an avenue to create awareness, initiate these conversations and seek to better inform its members on this issue.

Mental health concerns have risen in recent times in Nigeria, however, these conversations are not being had as much as it should.

The session, which was facilitated by Akanimo Ekong; a certified Mental Health Counsellor and Performance Coach was engaging and interactive with participant asking questions and getting answers on how to be empathetic in the workplace, how to spot danger signals and where to go to get help.

Participants left the session understanding new ways to navigate life for better mental wellbeing for themselves and others around them.

The CEO of Pension Fund Operators Association of Nigeria (PenOp), Mr. Oguche Agudah, said: “The workplace can sometimes seem like a war zone or a hostile and tense environment. People are already going through a lot and as managers or leaders of organizations, we need to support our employees and teams to overcome personal issues and be better individuals for the workplace and society.”

He concluded by encouraging participants to take the learnings into their workplace and homes.

PenOp has over the past months committed to enhancing capacity in the sector through its monthly knowledge sharing series which incorporates technical and soft skills training.

Patoma Admin by — October 22, 2021 in Pension 0
Onanuga advises Nigerians to embrace insurance, pension for secured live

By Favour Nnabugwu

 

The former Director-General, Lagos State Pension Commission (LASPEC), Mrs. Folashade Onanuga, has advised Nigerians to embrace insurance and pension as a means to ensure a secured live

Mrs. Onanuga said this while delivering the theme paper “Covid-19 Impact On Financial Inclusion: Opportunities For Insurance & Pension Sectors” at the sixth edition of the national conference of the National Association of Insurance and Pension Correspondent (NAIPCO) held recently in Lagos.

Onanuga said, “More than ever before, if you are serious about your life, if you want to live a meaningful life, you need to plan for yourself and that is why both insurance and pension is something we should all embrace as Nigerians,”

While emphasizing the need for Nigerians to embrace insurance and pension, she also tasked insurance and pension operators to be deliberately creative and innovative in their product development and services delivery, by ensuring that they focus on meeting the needs of the people, adding that “people will embrace the products and services that meet their need. The critical thing is meeting the need.”

According to her, unfortunately, the social security system in Nigeria is next to zero; so you need to plan for yourself so that if anything happens, you need to be able to stand.

She said in this era of COVID-19 pandemic, insurance and pension is what Nigerians need to lean on for a hopeful future.

“The World Bank estimates that the covid-19 crisis will result in 10.9 million Nigerians falling into poverty by January 2022. If we have learned anything, the pandemic and the ensuing economic crisis have highlighted the critical need for a functioning social security system to allow all Nigerians to achieve an adequate standard of living,

“If you really want to remain in business, you must take insurance, in the event of sudden occurrence like the pandemic, insurance will help you to stand back on your feet; in the event of you finding that because of the pandemic a breadwinner of a family dies, there must be a buffer to ensure that the family is not affected.

“Therefore, more than ever before, you find out that actually there is need for both insurance and pension products to ensure that we continue to live and meet our need of sustainable living, healthy living, wealthy living and of course, continuity in business. That is why it is important for all of us to identify that we have these needs for growth and continuity by taking up both insurance and pension products,” Mrs. Onanuga said.

In her goodwill message, Director General, National Pension Commission (PenCom), Mrs Aisha Dahir-Umar, who was represented at the event by the Commission’s Head, Corporate Communications, Mr. Peter Aghahowa, emphasized the need for Nigerians to embrace contributory pension, as a social security safety net.

He said the issue of gathering retirees physically in various locations across the country for verification is now a thing of the past with the online verification and enrolment portal recently launched by the Commission.

According to him, “Before now, we would congregate several retirees in different centres of the country to do the enrolment for the Treasury Funded retirees, and now that can be done online.

“I’m happy to announce that over 3,000 people have been enrolled through our online portal out of 11,000 expected to retire this year.

Also speaking, the representative of the Commissioner for Insurance and Chief Executive Officer, National Insurance Commission (NAICOM), Mr. Olorundare Sunday Thomas, Assistant Director, Market Development, Adeyemi Abubakar, called on Nigerians in all walks of life to embrace insurance as risk-mitigating mechanism.

While congratulating the NAIPCO members, for their consistency in organizing the conference, as a platform to ensure that they reach out to the public with their reportage on the insurance sector to ensure the growth of the insurance business in Nigeria.

The Commissioner for Insurance reminded NAIPCO of their role as purveyors of information, awareness creation and catalysts of economic growth, just as he solicited the continued cooperation of the Association for the growth of the industry.

He said for the Nigerian insurance market to record significant growth and contributes adequately to the nation’s gross domestic product (GDP), all hands must be on deck, noting that the media has a critical role to play in this especially in sensitizing the public on the benefits of insurance.

Thomas believes that deepening insurance penetration can only be possible through a deliberate and sustained insurance awareness which, he said, will also lead to the realization of the Federal Government’s financial inclusion initiative.

Patoma Admin by — October 17, 2021 in Insurance 0