All Posts in "Pension"

Contributory pension asset increases by N92bn in March

By admin

 

The Contributory Pension Scheme (CPS) assets lost some funds in February but recorded N92 billion increased in March.

The National Pension Commission (PenCom) disclosed this in its official website, in the unaudited report on pension funds industry portfolio for the period ended in March 31.

The commission recorded a decline of N51.30 billion in the pension fund assets in February.

According to the report, the funds which ended February at N12.248 trillion rose to N12.34 trillion at the end of March.

The report also revealed data on the approved existing schemes, Closed Pension Fund Administrators and Retirement Savings Funds including unremitted contributions at Central Bank of Nigeria and legacy funds.

Financial and pension Expert, Mrs Halima Idris, told 247naija that the increase was a progress on the last figure of February.

Idris said that the Pension Acts which allowed them to invest in the country’s economy, security and mutual funds was not stable.

She commended government’s efforts in the huge increase and urged Nigerians to be patient as the government was trying hard to save their money.

The total registration for Retirement Saving Account (RSA) at March was 9.3 million.

Patoma Admin by — May 18, 2021 in Pension 0
Over 15,418 insurance companies, banks, other sectors get compliance certificates from PenCom

By Favour Nnabugwu

 

Over 15,418 employers comprising Insurance companies, banks and other sectors of the economy have recurved compliance certificates from the National Pension Commission (PenCom) had as at May 10, 2021

Those companies had to clear the accounts if they wished to do business with the federal government.

PenCom in publication on its website entitled: Schedule of employers issued with certificate with provisions of the PRA 2014 as at May 10, 202.1

The remittance by companies showed AIICO Insurance contributed and remitted N193.93 million for its 296 employees in 2020, while NSIA Insurance, remitted N60.97 million for 128 employees and FBInsurance, remitted N128.36 million for 171 employees.

Linkage Assurance Plc, remitted N60.14 million for 174 employees; Custodian and Allied Insurance Limited, N59.91 million for 121 employees; Custodian Life Assurance Limited, N24.73 million for 49 employees and Unitrust Insurance Company Limited, N52.88 million for 115 employees.

Mutual Benefits Life Assurance Limited, remitted N51.32 million for 145 employees; Mutual Benefits Assurance Plc., N91.58 million for 198 employees; Regency Alliance Insurance Plc., N36.16 million for 119 employees and Jaiz Takaful Insurance Plc., M12.66 million for 36 employees.

Insurance brokers were also cleared and issued certificates. Plum Insurance Brokers Limited, was cleared having remitted N1.07 million for seven of its employees. Risk Analyst Insurance Brokers Limited, remitted N4.39 million for 29 employees and YOA Insurance Brokers Limited remitted N21.81 million for 52 employees.

It also showed Sterling Bank Plc., remitted N1.22 billion for its 2417 employees; Fidelity Bank Plc., remitted N827 million for 2904 employees and Reynolds Construction Company Limited, remitting N739 million for 3764 employees.

PenCom noted that Afrigblobal Insurance Brokers Limited remitted N6.14 million for 18 employees; Jolly & Partners Insurance Brokers Limited remitted N1.47 million for five employees and Manny Insurance Brokers Limited remitted N1.03 million for seven of its workers.

 

Patoma Admin by — May 17, 2021 in Pension 0
PenOp partners AVCA to develop private equity

By admin

Pension Fund Operators Association of Nigeria (PenOp) has partnered the African Private Equity and Venture Capital Association (AVCA) to empower local investors and develop private equity (PE) as an asset class in Nigeria.

Speaking about the partnership, PenOp Chief Executive, Mr. Oguche Agudah to Inspenonline said,  “Pension funds realise that they need to diversify into alternative investments and private equity presents one of such opportunities.

“However, we haven’t seen that much uptake of this locally. In addition to other initiatives we are pursuing, we are hoping that this partnership with AVCA will help to further open up this space.”

He maintained that domestic capital plays a vital role in accelerating economic growth in Nigeria and across the continent in general. Over the past 5-10 years, the value of Nigerian pension funds has grown markedly to peak at over US$25bn in December 2020, of which 0.03% has been allocated to private equity.

This partnership between PenOp and AVCA, Oguche said will focus on training and networking, including an introduction to Development Finance Institutions (DFIs), fund managers and other stakeholders within the global private equity ecosystem, to ensure the growth of private equity in Nigeria, especially for pension operators.

He submitted that as part of this collaboration, PenOp will also support AVCA’s research and advocacy by providing insight into pension fund investments in PE and their impact.

During the African Institutional Investor Roundtable hosted at AVCA’s annual conference in April, there was a discussion about ways to encourage pension funds on the continent to increase their allocations to private equity.

The roundtable event was a partnership between PenOp, AVCA, Southern African Venture Capital and Private Equity Association (SAVCA) and East Africa Venture Capital Association (EAVCA). The event was attended by several Nigerian pension funds and international DFIs. It was enlightening and engaging, and the outcomes from the event will be reviewed by all associations involved, with a view to working on removing the identified roadblocks.

Abi Mustapha-Maduakor – CEO of the African Private Equity and Venture Capital Association (AVCA) said: “Our mission at AVCA is to facilitate more private investment into Africa, and part of this work involves unlocking domestic capital by demystifying the asset class. We know that African institutional investors are increasingly looking at PE to diversify their portfolios, so this collaboration with PenOp will enable us to equip Nigerian pension funds with the tools and resources they need to achieve superior returns by investing in the continent’s growing businesses.”

About AVCA

The African Private Equity and Venture Capital Association is the pan-African industry body which promotes and enables private investment in Africa.

Patoma Admin by — May 7, 2021 in Pension 0
We are looking @ alternative investment to increase yields – PenOp

By Favour Nnabugwu

 

The Pension Fund Operators Association of Nigeria (PenOp), is looking has said it is investment alternative aside from the government bonds and treasury bills to increase returns on investment as pension funds asset suffered a N51.30 billion decline in February.

The Chief Executive Officer of PenOp, Mr. Oguche Agudah, said this recently at a virtual training organized by PenOp for members of the National Association of Insurance and Pension Correspondents (NAIPCO).

Agudah who noted that the pension fund assets decline of N51.30 billion in February was mainly attributed to the depreciation in the prices of Fixed Income Securities (FISs) in the trading portfolios of the Approved Existing Schemes (AES), RSA Funds II and IV and Closed Pension Fund Administrators (CPFA), explained that the loss in percentage is minimal when subtracted from the N12.29 trillion pension asset.

He said, “If you examine the N51.30 billion depreciation from the N12.29 trillion pension funds in January 2021, you will notice it is not even up to 0.01 per cent, so the percentage loss here is minimal.

“However, we know there are concerns about the decline in the pension value of assets and the honest truth is that pension funds need to invest more in other assets classes outside of the government bonds and treasury bills which are the safest. So, safety is the first option adopted when investing in any asset”

“Currently pension funds cannot invest in foreign bills because there are regulations which need to be approved by the government. However, we are looking out for other various outlets and areas where the funds can be invested; areas like private equity, but the honest truth is that we need to balance between safety and returns. Notwithstanding, the industry is looking at other alternative investment instruments”, Agudah maintained.

For her part, the Head of Media, Communications and Branding Committee, PenOp, Mrs. Amaka Andy-Azike, explained that the decline in the pension funds are unrealized losses according to the terms of the equity market but pension funds operators are sourcing for other means to increase the yields.

“As operators, we focus more on the safety of funds when investing even as we try to also give fair returns on your investments. The decline in pension funds was because of the market volatility; the money market, bonds and treasury bills have been fluctuating due to the nature of what the economy experienced last year and is still going through.

“Fortunately, as we speak, the yields have increased greatly. Before now, for instance, our money market yield was like 0.5 to 2 per cent but now some banks are offering 10 per cent.

“Indeed, the prices of bonds also decline; it was trending for 6 per cent in some areas for long-term and 4 per cent for short to medium term but today, yields on bonds have started trending upwards. So, if you do a revaluation of the previous loss on pension funds, you will discover that it is not up to the N51 billion.

“Also, it is worthy to note that in the equity market most of these losses are not actual losses, they are unrealized losses because when the equity market goes up again, these yields will rebound and you will get much more. So, some of these losses are not realized losses and some have been corrected because there is increase in yield now in all our instruments; and we are currently looking out for other platforms that are safe to invest the funds. So, for us, the safety of your funds come first in all investment we partake”.

Patoma Admin by — May 4, 2021 in Pension 0
No pensioners under Defined Benefits Scheme will be left out – PTAD

By Favour Nnabugwu

 

The Pension Transitional Arrangement Directorate (PTAD) has said no pensioner under the Defined Benefits Scheme (DBS) would be left out in the recently approved federal government pension consequential addjustment.

PTAD in a statement by its Head, Corporate Communications Unit, PTAD, Olugbenga Ajayi, said it attention has been drawn to the statement issued by the Federal Parastatals and Private Sector Pensioners Association of Nigeria (FEPPAN) in the Vanguard Newspaper (online edition) of 1st May 2021 in which the Association alleged that it had been left out of the consequential pension adjustment approved by President Muhammadu Buhari.

“We would like to state emphatically that Mr. President’s approval under reference covers all pensioners under the Defined Benefit Scheme (DBS) including parastatal pensioners who constitute the membership of FEPPAN, and does not discriminate against any category of pensioners.

“For the avoidance of doubt, the Directorate has already computed the entitlements of all its pensioners and will commence the immediate implementation of the consequential increment as approved by Mr. President. This, therefore, renders any call of potential engagement of any Federal Government agency by FEPPAN irrelevant as all its members are covered under the DBS umbrella as stated in the circular released by the National Salaries Wages and Incomes Commission (NSWIC),” it said.

PTAD noted that It would, therefore, like to use this opportunity to continue to appeal to the leadership of all pension unions to avail themselves of the freedom of information offered by the Directorate pertaining to all pension matters in order to avoid the unfortunate misconception of laudable government policies as was evident in the news story mentioned earlier

Patoma Admin by — May 2, 2021 in Pension 0
Federal Civil Servants want return of gratuity, review of Pension Act

By admin

The civil servants under the eagis of President, Association of Senior Civil Servants of Nigeria (ASCSN) have demanded the immediate and quick return of payment of gratuity to retirees at the point of retirement.

The return of gratuity, they said, would motivate workers for effective productivity and service delivery, while in service and also end the suffering of pensioners, which they now experience immediately after retirement.

To this end, labour has demanded an immediate review of the Pension Act and has approached the Federal Government to effectively and unambiguously reflect the payment of gratuity in the Act

Already, the Head of Civil Service of the Federation has promised to set up a committee to look at the issue of re-introduction of gratuity to retiring workers.

ASCSN President, Comrade Tommy Etim Okon, said there is no provision in the Pension Act and any extant law, that erased payment of gratuity.

He added that the union has already written a memo to the Federal Government, through the Head of Service of the Federation, to demand the immediate return of gratuity.
When you look at the Pension Act as amended in 2014, you will find out that there is no provision that has stopped payment of gratuity to Nigerian workers.” Comd. Tommy said while speaking to Tribune Online in Abuja.

The ASCSN president pointed out that the association along with other trade unions and comrades in the struggle would approach the issue with the government and ensure that the Pension Act is revisited.

He said: “It is inhumane for a worker to put in 35 years or reached sixty years old as the case may be and you just wait for pension without something to say thank you. That was the essence of gratuity but I bet you, since the issue of pension came, nobody is talking about that aspect and there’s no provision in the Pension Act that has eroded that aspect. So, we need to look at that.”

On the issue of Contributory Pension Scheme, Comd. Tommy insisted that there was no provision in that Act that says that management should not pay gratuity.
He added: “Contributory Pension Scheme is your money and government is only paying a certain percentage and you are also paying a percentage. So, that does not stop the government from saying thank you.”

He cited an example of other government parastatals or agencies, especially the Central Bank of Nigeria (CBN) where workers still receive gratuity after retirement, apart from their huge and fat salaries.

According to him, “we are not running a different economy, the workers in the Central Bank of Nigeria (CBN) and other agencies are earning far and fat. For example, for a worker that has gotten to a directorate cadre, when you leave the Central Bank of Nigeria, you are collecting nothing less than N130 million just to say thank you and then your pension keeps coming.

So, why is it different in the public sector? I can challenge anyone to show me where in the pension Act, that says that gratuity should not be paid. We can’t talk about the issue of contributory Pension and you think, that has eroded the gratuity. It has not eroded it.

“We need to go back and look at the interpretation of some of those provisions for us to be in line with the reality on ground. That is why, when a worker is retired, he becomes a beggar. What on earth will keep a retiree for three to four years before receiving pension?

“It, therefore, means that the worker has put in all of his or her best, only for the government to throw them away into an economy that they never planned for. So, they die even before they get their pension. But if they have collected a gratuity, that would have even helped them to live long because most of them even live on drugs.”

However, he ruled out any legal option, saying that legality is not the solution to the problem of industrial relations but the application of a lobbying mechanism.

He said: “We have put up a memo to the Head of Service and the memo is presently before the Head of Service. We expected a committee to be set up by her to look at it and then we take it up from there. So, it is not all about legality, it has to also do with morality.

“In the memo, we raised some issues including this, and the Head of Service promised to set up a committee so that we look at it together, but we are still expecting that committee to be set up. Once the committee is set up, then we proceed from there. I am very sure that the resolution from that committee, the position paper will be approved and gratuity will return to the service.”

Patoma Admin by — April 6, 2021 in Pension 0
PFA, Life underwriters pay N205.12bn death benefits to 62,596 workers’ relatives

The Pension Fund Administrators and life underwriters providing group life cover have paid a whopping sum of N205.12bn death benefits to 62,596 deceased workers’ relatives.

The National Pension Commission since the inception of Contributory Pension Scheme, CPS on approval of death benefits for the fourth quarter confirmed this.

The CPS which was introduced by the Pension Reform Act in 2014 mandates the employers in public and private sectors to ensure their workers open Retirement Savings Accounts with PFAs.

It also mandates the employers to remit a total of 18 per cent of the monthly emoluments of the employees, comprising 10 per cent employer and eight per cent employee contributions into the respective RSAs.

PenCom stated that in the fourth quarter of 2019, “The commission approved the payment of N4.28bn as death benefits to the beneficiaries of the 1,586 deceased employees during the quarter under review, which brought the total number of deceased employees from both public and private sectors to 55,820.

The amount paid during the quarter moved the total payments of death benefits to N173.86bn.”

This is in addition to having a group life insurance cover for the workers, which guarantees three times annual emolument as death settlement

It added that in Q1, 2020, “The commission approved the payment of N9.34bn as death benefits to the beneficiaries of the 2,086 deceased employees during the quarter under review.

In Q2, 2020, “The commission approved the payment of N2.58bn as death benefits to the beneficiaries of the 591 deceased employees during the quarter under review.

“The commission approved the payment of N8.56bn as death benefits to the beneficiaries of 1,821 deceased employees during the Q3, 2020.

In Q4, 2020, “During the quarter under review, approvals were granted for payment of death benefits amounting to N10.78bbn to the legal named beneficiaries/administrators of 2,278 deceased employees and retirees, (comprising 1,582 public (FGN and states) and 696 private sectors).

These brought the total death figure and death settlements to 62,596 cases and N205.12bn respectively.

According to the commission, the contributors under the CPS rose slightly to 9.24 million in January from 9.22 million in December.
The commission disclosed that out of the employers that applied, a total of 1,877 organisations got its clearance for putting in place appropriate pension and insurance covers for their employees in the fourth quarter of 2020.

This qualified them to do business with the Federal Government.

It stated, “The commission received a total of 1,900 applications from private sector organisations for the issuance of pension clearance certificates.

“Out of this number, PCCs were issued to 1,877 organisations while 23 applications were declined due to inability of the organisations to meet the requirements for issuance of certificates.

“The records show that a total sum of N9.88bn was remitted into the RSAs of 41,923 employees of the 1,877 organisations.

Patoma Admin by — April 5, 2021 in Pension 0
Assets Under Managent increases to N12.30trn in Jan 2021

By Favour Nnabugwu

Assets Under Management (AUM) of the regulated pension industry increased by 17.9 percent to N12.30 trillion (USD31.2billion) at end of January 2021.

In the National Pension Commission latest report, the asset mix remained heavily skewed towards FGN securities, which represented 65.9 percent of the total.

The corporate debt market has grown from a small base with some high-profile new issues. Holdings rose by 28.2percent in the year to N836bn in January.  When we add state government and supranational issuance into the mix, we find fixed income exposure equivalent to 73.8 percent of the industry’s AUM.

Pencom’s Kenyan counterpart, the Retirement Benefits Authority, shows total AUM of KES1.32trn (USD12.4bn) at June ’20: there was sizeable exposure to immovable property (18.6 percent) and listed equities (14.2percent) alongside the largest share in government securities (44.0percent).

The holdings of FGN paper are predominantly the bonds, which represented 59.6 percent of total AUM. This was an increase of four percentage points in just one month. In a year, the share of NTBs has collapsed from 15.2 percent to 5.4 percent

The share of domestic equities rose from 5.7 percent to 7.5 percent over the twelve months, and members’ holdings by 54.6percent to N920bn. Over the period the all-share index (ASI) increased by 47.0 percent.

The ASI was still in negative territory ytd at the start of October ’20 and closed the year with a thumping gain of 50.0 percent, making it the best performing index.

One driver was the noted shift by PFAs into equities as returns on first NTBs and then FGN bonds crashed in November and December. At that point, the dividends paid by a good number of blue-chip listed companies offered a better return than FGN paper.

While we have a plausible explanation for the surge on the ASI in Q4 ’20 we now have to prepare for the consequences of a retracement in yields on FGN paper. For the year,  the yield has recovered from below 1 percent in December to above 6 percent, and for the longest maturity FGN bond (Mar ’50) from less than 7 percent to about 11.5 percentover the same timeframe.

The average value of a retirement savings account (RSA) at end-January was N1.03m, marginally higher than the previous month.

Just N81m was invested at end of January in the newest RSA fund (no V), which has been created for micro pensions. It has been in operation since January  2020.

 

Patoma Admin by — March 31, 2021 in Pension 0
924 workers withdraw N1.01 bn from RSAs in Q4 2020

By Favour Nnabugwu

 

The Contributory Pension Scheme (CPS) witnessed the withdrawal of N1.01 billion by 924 workers from the voluntary contributions in their Retirement Savings Accounts (RSAs) with their Pension Fund Administrators (PFAs) in the Q4 quarter of 2020.

The National Pension Commission (PenCom), disclosed this in its 2020 fourth quarter report.

“During the quarter under review, the Commission granted approval to 924 contributors for the withdrawal of voluntary contributions amounting to N1,011,283,273.66”, the report stated.

An analysis of this quarter’s report revealed a decrease in withdrawal by workers when compared with that of the 2020 third quarter report which saw the sum of N2.18 billion withdrawal from about 1,286 workers under the scheme.

According to the guidelines on voluntary contribution under the CPS, PenCom states that, the main purpose of the Pension Reform Act 2014 is to introduce a pension system that is sustainable and has the capacity to achieve the ultimate goal of providing a stable, predictable and adequate source of retirement income for each employee in Nigeria

“The Pension Reform Act 2014 allows employees to make, voluntary contributions into their Retirement Savings Account, in addition to their mandatory pension contributions, with the sole aim of enhancing their retirement benefits.

“Voluntary contributions under these guidelines shall be non-obligatory contributions made by any employee in the formal sector through the employer.

“Employees of organisations with less than three employees as well as self-employed persons as provided in Section 2 (3) of the Pension Reform Act 2014 (PRA 2014) shall be covered under the guidelines for micro pensions.

“Voluntary contributions shall be remitted into and withdrawn from a duly registered RSA, managed by a licensed PFA”, the guideline says.

Stating the rules of general application, the Commission stated that any eligible contributor under these guidelines must notify his employer in writing of his intention to make voluntary contributions and the amount be deducted from his emoluments and remitted as voluntary contributions.

In addition, PenCom noted that voluntary contributions should be made from employee’s legitimate income, which should not be more than one-third of the month’s salary in line with the Labour Act, 1990.

The guideline further stated that “all voluntary contributions must be remitted through an employer into the RSA.

“Failure to deduct or remit voluntary contributions within the time stipulated in Section 11 (6) of the PRA 2014 on behalf of a contributor by an employer shall attract the same penalty to be stipulated by the Commission.

“The Commission sets out the modalities and broad guidelines under which voluntary contributions can be administered.”

Speaking on the objectives of the guidelines, PenCom said they are to establish a uniform set of rules for the operation of voluntary contributions and eligibility criteria for participation in voluntary contributions.

Further outlining the objectives, the commission said it seeks “to provide the procedure for making voluntary contributions, and necessary safeguards and modalities for its withdrawals.

“To utilise voluntary contributions for the purpose of enhancing future retirement benefits for active or mandatory contributors. To encourage retirees under the CPS to utilise part or all of the voluntary contributions to augment their existing pension.

“The guidelines aim to assist retirees under defunct Defined Benefit, exempted persons and foreigners to save in order to cater for their livelihood during old age. To assist improvident individuals by ensuring that they saved in order to cater for their livelihood during old age.”

It is also important to note that the scheme provides a platform for an RSA holder to make voluntary contributions, in addition to the statutory contributions being made by him and his employer.

The above guidelines apply to any employee in the public service of the federation, the public service of the Federal Capital Territory, the public service of the State Government, the public service of the Local Government Councils and the private sector.

Patoma Admin by — March 27, 2021 in Pension 0

The mother of the National Pension Commission (PenCom) Spokesman, Peter Aghahowa, Mrs. Alice Aghahowa had passed on at aged 88

Late Mrs. Alice Aghahowa passed on to be with the Lord on Saturday, March 6, 2021. She was aged 88 years old and survived by four children, 12 grand children and great grand children.

The Chairman, National Association of Insurance and Pension Correspondents (NAIPCO), Chuks Udo Okonta, on behalf of members of the association, sent a heart felt condolence to the Aghahowa family and prayed God to grant the deceased an eternal rest.

Patoma Admin by — March 17, 2021 in Others 0