Yar’adua last Wednesday said at the National Conference on Pension Reform that the payment of pensions was still fraught with discrepancies, therefore making the review of the Act necessary.
Yar’adua who was represented at the event by Secretary to the Government of the Federation (SGF) Yayale Ahmed expressed optimism that the review of the Act would afford the necessary authorities opportunity to identify the grey areas with a view to plugging the loopholes that had been giving way for malpractices.
He charged the National Pension Commission (PenCom) to adopt stiffer measures to stop the ugly trend and improve pension administration in the country.
He said the federal government in collaboration with the National Assembly was reviewing the Pension Reform Act adding that the new Pension Reform Act, which he said, was expected to make the industry more efficient and checkmate corruption, would soon be in force.
“There is still element of corruption in pension payment. Because of the transparency of this administration and its stance against corruption, the trend will be stopped with the expertise and effort of PenCom, the pension industry regulator,” the president stressed.
Yar’Adua who lamented that the non-contributory pension scheme still had huge pension arrears, hoped that the arrears would be settled by the government.
It was disclosed that, out of the N1.1 trillion that had been contributed by workers across the country in the last five years, the private sector had accounted for N770 billion, representing about 70 percent of the contributory pension fund.
Director-General of the commission, Mr. Muhammad Kabiru Ahmad said, “Out of N1.1 trillion that has been contributed in the last five years, about 70 percent came from the private sector. That shows the level of confidence the private sector has in the scheme.”
Ahmad expressed delight that, most of the major companies in the economy including the banking, communications, oil and gas and insurance companies, had fully complied with the Pension Reform Act 2004 (PRA 2004). He however pointed out that few had been violating the Act.
He said, “Having identified the companies that have not been complying, PenCom has commenced the process of litigation against them.”
Said he, “At presently, we can conveniently say most of the major companies in banking, communications, oil and gas, insurance are fully complying with this Act. But of course, we still have some that have been relaxing and we are engaging them. We have commenced the process of litigation by advising them on the actions that we are going to take.
“And of course, the greater part of it is the smaller ones. We have been reaching out to them through their regulatory agencies, associations and unions. We have been able to compile lists that will assist us.”
Declaring the conference closed, Director-General of Infrastructure Concession Regulatory Commission (ICRC), Dr. Mansur Ahmed who represented the Economic Adviser, Dr. Tanimu Yakubu said, the contributory pension scheme, despite being in existence for only five years, had promoted the private sector investment in the real sector.
He lauded the review of the pension reform implementation process, which according to him, would help the commission achieve its purpose.
Ahmed however, pointed out that, huge investments would have to be made in infrastructure, with a view to ensuring that the federal government met the targets of the Vision 2020.
He maintained that, availability of long-term pension fund was key to this. He appealed to the private sector to support the scheme and access funds for infrastructural development of the country.
Ahmed expressed confidence that resolutions reached at the conference would deepen the nation’s economic development as necessary changes in the laws would make it work for the development of the country.
The two-day conference carried out a diagnostic review of the implementation of the pension reform. Views from various stakeholders on several aspects of the pension reform were discussed extensively with further deliberations made at syndicate sessions resulting in various recommendations.
As part of the recommendations, the conference agreed that contribution rates should be subject to negotiations with individual companies and employees.
On retirement age/life expectancy, the conference advised that “the age for accessing retirement benefits should continue to be in accordance with terms of employment as currently provided for by the PRA 2004.
Also, according to the national conference, gratuity under the Contributory Pension Scheme should be subject to collective bargain.
As for the Pension Fund Investments, the conference resolved that “investment of pension funds in infrastructure be either through structured funds or direct participation in well conceived projects.”
There was a consensus that all provisions of the PRA 2004 that violated the provisions of the Constitution be brought in line with the Constitutional provisions.
According to them, section 5 of the PRA 2004 should be reviewed to allow state administration of estate laws to apply.