PenCom moves to amend Pension Reform Act after 12 years

The National Pension Commission has commenced a review of the Pension Reform Act, 2014, saying the law needs to be updated to reflect current realities, address implementation gaps and improve retirement outcomes for millions of Nigerians.

The Director-General of PenCom and Chairman of the Pension Industry Leadership Council, Omolola Oloworaran, disclosed this on Tuesday during a press conference following the third meeting of the Council held at Fraser Suites, Abuja.

The quarterly meeting brought together leaders of Pension Fund Administrators, Pension Fund Custodians, Closed Pension Fund Administrators and the Commission to review the industry’s performance, deliberate on ongoing reforms and set priorities for improving pension administration and retirement benefits.

Responding to questions from journalists on the ongoing review of the pension law, Oloworaran said the legislation, last amended 12 years ago, required modernisation to support reforms being pursued by the commission.

“The reason we are reviewing is to modernise the Act,” she said.

“Things continue to change, and we continue to come up with reform ideas that improve the lives of ordinary Nigerians who are part of the scheme. So, the whole essence of the review is to modernise the Act and ensure that it reflects conditions of today.”

She added that the review would also address weaknesses identified during the implementation of the existing law.

“Certainly, we did have some implementation gaps in the previous Act that we’ll also try and correct in this Act,” she said.

The PenCom boss, however, declined to disclose the specific amendments being proposed, noting that consultations with key stakeholders were still ongoing.

She stressed that the proposed amendments were intended to improve the welfare of contributors and retirees.

“One thing you should know is that all the amendments that are being proposed are all in the interest of ordinary Nigerians who are part of the scheme, and it will make their lives better,” she said.

Earlier, Oloworaran said the council had deliberated on several initiatives aimed at making Nigeria’s pension industry more inclusive, globally competitive and beneficial to contributors.

She said discussions centred on improving retirement outcomes, expanding pension awareness and literacy, strengthening industry participation in the capital market and advancing the proposed Pension Industry Infrastructure Fund.

“One thing that was clear from today’s engagement is the need to ensure better outcomes for all contributors, for ordinary Nigerians contributing to this scheme,” she said.

She announced that PenCom would hold its first National Pension Week from September 15 to September 19 to improve awareness and understanding of pension administration.

“We’ve seen a gap in pension literacy and awareness. So, the committee is working on a bunch of initiatives to improve the literacy amongst Nigerians so that people can understand pensions more.

“This will help us with accountability and better transparency to contributors and, in addition to that, create more awareness to be able to drive our personal pension plan better.”

According to her, the pension industry also plans to deepen engagement with capital market operators because pension funds represent the country’s largest pool of long-term domestic savings.

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She also said the proposed Pension Industry Infrastructure Fund had reached an advanced stage.

The commission also disclosed that it was introducing a liability-driven investment framework to improve retirement outcomes.

“We continue to look at all initiatives, both locally and globally, that can help us to achieve our goals in terms of ensuring that we’re putting more money in the hands of ordinary Nigerians, and that when people retire, they can retire with peace of mind.”

On compliance, Oloworaran said PenCom would strengthen enforcement against employers who fail to remit workers’ pension contributions, revealing that the commission would soon begin working with the Economic and Financial Crimes Commission after partnering with the Independent Corrupt Practices and Other Related Offences Commission.

“Compliance and enforcement remain a top priority for us,” she said.

“PenCom continues to work with the necessary agencies, ICPC and now EFCC, to be included very soon, to ensure that all employers are contributing pensions for their staff and are remitting as well.”

During the question-and-answer session, Oloworaran disclosed that only eight states had fully implemented the Contributory Pension Scheme, although two additional states were close to joining.

She said the commission remained concerned that workers in states yet to adopt the scheme risked uncertainty over their retirement benefits.

The PenCom boss also admitted that the commission had yet to make significant progress towards its target of enrolling one million women under its Personal Pension Plan.

“I was hoping that we would get one million women on board, but we haven’t even gotten close to that. The numbers are still very low, which is why I spoke about awareness and pension literacy.”

She said the commission was engaging market women associations, transport unions and other groups to increase participation in the informal sector.

On the pilot health insurance initiative for retirees, Oloworaran said eligibility had been expanded from pensioners earning monthly pensions of N70,000 and below to those earning up to N150,000 to increase enrolment.

According to her, the pilot currently has about 13,000 participants against a target of 30,000.

“We have 13,000 people, and we need to be able to run the pilot with a critical mass,” she said.

“So everybody that takes pension of N150,000 and below can go and try to onboard on the initiative, and they’ll be entitled to three years of health insurance.”

She explained that the higher income threshold was temporary and intended solely to increase participation during the pilot phase before the scheme is fully rolled out.

PUNCH Online earlier reported that the Independent Corrupt Practices and Other Related Offences Commission and the National Pension Commission recovered over N3bn in unremitted pension contributions from defaulting employers as both agencies intensified efforts to enforce compliance with the Pension Reform Act 2014.