PenCom reviews pension template for retirement benefits
The National Pension Commission (PenCom) has begun the review of the new programmed withdrawal template for the computation of retirement benefits under the Contributory Pension Scheme (CPS).
In a published statement yesterday, the commission said the new template was introduced on May 15, 2018 to address the complaints of low monthly pensions due to low balances for some Retirement Savings Account (RSA) holders.
It said the review of the new template is to enable the commission address concerns of all stakeholders in line with its philosophy of consultation.
PenCom said the general public and stakeholders in the pension industry should take note of the review process.
The commission directed licenced Pension Fund Administrators (PFAs) to revert to the old programmed withdrawal template in the processing of retirement benefits of retirees under the CPS until further notice.
…Explains circular voluntary contributions
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Meanwhile, PenCom has said the circular on Voluntary Contributions (VCs) it recently issued was to curb the high rate of incessant withdrawals by contributors.
The Acting Director-General of PenCom, Mrs Aisha DahirUmaru, made the assertion at the 2018 Conference of National Association of Insurance and Pension Correspondents (NAIPCO) in Lagos yesterday.
She said the thrust of the circular, released by the commission in Nov. 2017, states: “That 50 per cent of the VCs can be withdrawn once in every two years.
“Also, every subsequent withdrawals will be on incremental contributions from the last withdrawal. Furthermore, the remaining 50 per cent of the VCs shall be domiciled for augmenting pensions at old age.”
Dahir-Umaru added that “The circular issued was necessitated by the observed incidences of high rates of withdrawals from VCs by contributors.
“The incessant and high withdrawals negated the main purpose of using such contributions to augment pensions at old age,’’ she added.
The acting director-general, represented by the Head, Contribution Bond Redemption Department, Mr Olulana Loyinmi, said the number of total pension contributors increased by 312,291 from Jan. 2018.
The number, she said, increased from 7.89 million in December 2017 to 8.14m as at June 2018.
She noted that the net assets value of pension hit N8.23 trillion by June 2018. “This represents an increase of N716.94 billion up from the value of N7.52trn as at December 2017.
“The increase is attributed to new contributions received, interest on fixed income securities and net gains on equity and mutual fund investments,” she explained.