Pen­sion as­sets to rise above N8.4trn as reg­u­la­tor, PenCom, ex­pands vol­un­tary con­tri­bu­tions

Business a.m. - - COMPANY - Nse An­thony-Uko

PUB­LIC OR PRI VATE SEC­TOR em­ploy­ees, re­tired or dis­en­gaged per­sons cur­rently re­ceiv­ing pen­sion un­der the Con­trib­u­tory Pen­sion Scheme (CPS), or any worker/re­tiree in an or­gan­i­sa­tion that op­er­ates a closed pen­sion fund ad­min­is­tra­tion and who were em­ployed prior to June, 2014 are now el­i­gi­ble to make vol­un­tary con­tri­bu­tions, the new guidelines on vol­un­tary con­tri­bu­tion re­leased by the Na­tional Pen­sion Com­mis­sion (PenCom) has shown.

Other cat­e­gories of peo­ple el­i­gi­ble un­der the guidelines in­clude any for­eigner re­sid­ing and work­ing in the for­mal sec­tor in Nige­ria; any per­son who re­tired, dis­en­gaged or whose em­ploy­ment was ter­mi­nated and is cur­rently re­ceiv­ing pen­sion un­der the CPS, but se­cures an­other em­ploy­ment on con­tract ba­sis; mem­bers of the armed forces, the in­tel­li­gence and the se­cret ser­vices of the fed­er­a­tion; any per­son who is ap­pointed by the Pres­i­dent of the Fed­eral Repub­lic of Nige­ria, state govern­ment and elected of­fi­cers to hold of­fice for a stip­u­lated tenor and who is not a ca­reer civil ser­vant, as well as any re­tiree un­der the de­funct de­fined ben­e­fit scheme, who se­cures an­other con­tract em­ploy­ment.

The new vol­un­tary con­tri­bu­tion, ex­pected to in­crease to­tal pen­sion as­sets put at N8.35 tril­lion as at Au­gust, how­ever ex­cludes the in­for­mal sec­tor, which still has to wait for the much ex­pected mi­cro pen­sion scheme to be in­tro­duced to en­able them be­gin to save to­wards their re­tire­ment.

Ac­cord­ing to the new guidelines ob­tained by busi­ness a.m. on the PenCom web­site, the vol­un­tary pen­sion con­tri­bu­tions (VPC) is sim­ply to al­low Re­tire­ment Sav­ings Ac­count (RSA) hold­ers to make ad­di­tional con­tri­bu­tions be­yond the statu­tory em­ployee and em­ployer monthly con­tri­bu­tions.

Peter Agha­howa, head, cor­po­rate com­mu­ni­ca­tions at the com­mis­sion in an ex­plana­tory state­ment said the re­lease of the guide­line was in fur­ther­ance to car­ry­ing out its man­date of reg­u­lat­ing the pen­sion in­dus­try.

The com­mis­sion said part of the ob­jec­tive of the new guidelines is to es­tab­lish a uni­form set of rules for the op­er­a­tion of vol­un­tary con­tri­bu­tions and el­i­gi­bil­ity cri­te­ria for par­tic­i­pa­tion in the con­tri­bu­tions.

It is per­ti­nent to note that the Pen­sion Re­form Act (PRA) 2014 al­lows em­ploy­ees to make vol­un­tary con­tri­bu­tions into their RSA in ad­di­tion to their manda­tory pen­sion con­tri­bu­tions, with the sole aim of en­hanc­ing their re­tire­ment ben­e­fits.

“Ac­cord­ing to the is­sued guidelines, vol­un­tary con­tri­bu­tions shall be non-oblig­a­tory con­tri­bu­tions made by any em­ployee in the for­mal sec­tor through the em­ployer.

“The ob­jec­tives of the re­leased guidelines are to es­tab­lish uni­form set of rules for the op­er­a­tion of vol­un­tary con­tri­bu­tions and el­i­gi­bil­ity cri­te­ria for par­tic­i­pa­tion in the con­tri­bu­tions and to pro­vide the pro­ce­dure for mak­ing vol­un­tary con­tri­bu­tions as well as nec­es­sary safe­guards and modal­i­ties for its with­drawals.

“The guide­line will en­able con­trib­u­tors to utilise vol­un­tary con­tri­bu­tions for the pur­pose of en­hanc­ing fu­ture re­tire­ment ben­e­fits for ac­tive or manda­tory con­trib­u­tors, will en­cour­age re­tirees un­der CPS to utilise part or all of the Vol­un­tary Con­tri­bu­tions to aug­ment their ex­ist­ing pen­sion, will as­sist re­tirees un­der de­funct De­fined Ben­e­fit Scheme (DBS), ex­empted per­sons from the CPS and for­eign­ers to save in or­der to cater for their liveli­hood dur­ing old age,” Agha­howa said.

The com­mis­sion, how­ever, urged con­trib­u­tors to be ad­here to the guidelines and en­cour­aged them to di­rect all their en­quiries con­cern­ing vol­un­tary con­tri­bu­tions to their re­spec­tive Pen­sion Fund Ad­min­is­tra­tors (PFAs).

Mean­while, the com­mis­sion in a bid to fur­ther en­lighten the pub­lic on the op­er­a­tion of the CPS, has be­gun a ra­dio pro­gramme ti­tled: “Re­tire­ment Mata”.

The pro­gramme, which made its de­bute on Oc­to­ber 26, 2018, is a weekly 30-minute pid­gin pro­gramme, which will be on air ev­ery Fri­day on NAIJA 102.7FM, La­gos, at 5:00pm.

The Com­mis­sion called on work­ers and re­tirees un­der the CPS to lis­ten to the pro­gramme, not­ing that it will be in­ter­est­ing and ed­uca­tive.

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