The House of Representatives unveiled plans on Tuesday to investigate the activities of the National Pension Commission (NPC) and Chief Executive Officer of Pension Fund Administrators (PFAs) over the money accrued into the Retirement Savings Account (RSA) since its inception.
The resolution was passed as a sequel to the adoption of a motion on the ‘Plight of Retirees under the Contribution Pension Scheme,’ sponsored by Hon. Clement Jimbo.
In his lead debate, Hon. Jimbo observed that the Pension Reform Act, 2014, was enacted to govern and regulate the administration of the uniform contributory pension scheme for both the public and private sectors in Nigeria.
“The House also notes that the objectives of the Pension Act, as spelled out in Section I of the Act, are to establish a uniform set of rules, regulations, and standards for the administration and payment of retirement benefits for the Public Service of the Federation, the Public Service of the Federal Capital Territory, the Public Service of the State Governments, the Public Service of the Local Government Councils, and the Private Sector.
“The House further notes that the Act was established to ensure that every person who worked in the public service and the private sector receives his or her retirement benefits as and when due, as well as assist improvident individuals to cater for their livelihood in old age.
“The House observes that the Act also establishes a Contributory Pensions Scheme (CPS) for payment of retirement benefits to employees to whom the Scheme applies under the Act.
“The House is aware that the Act further establishes a Retirement Savings Account (RSA), which specifies that a holder of the account shall, upon retirement or attaining the age of 50 years, whichever is later, utilize the amount credited to its RSA for the benefits specified in Section 7 Subsection I (a) (e) of the Act.
“The House is also aware that where an employee voluntarily retires, disengages, or is disengaged from employment as provided for under Section 16(2) and (5) of the Act, the employee may, with the approval of the National Pension Commission (NPC), withdraw an amount of money not exceeding 25% of the total amount credited to his RSA.
“The House also observes that most government retirees complained of rip-offs under the guise of managing their benefits and entitlements under the Contributory Pension Fund Scheme operated by the Pension Fund Administrators (PFAs).
“The House is concerned that the retiree’s complaint that the Contributory Pension Scheme denies them a greater share of the lump sum after retirement is that 25% of the total amount credited to their RSAs is usually dispensed across the board under the scheme, while the balance of 75% is retained by the PFA for investment in the capital market with high returns, which is never added to the retirees’ monthly payments.
“The House is also concerned that with the rising value of the dollar against the naira, the removal of fuel subsidies, and the increase in the price of goods and services, such paltry monthly payments, which remain the same for years, cannot sustain the retirees who have served the country honourably for 35 years.
“The House is worried that Pension Fund Administrators’ 75% RSA investments have not yielded adequate returns to Nigerian workers post-retirement due to inflation and naira dwindling fortunes, causing further economic impoverishment.
“The House is also worried that an investment of 5 million naira in Treasury bills at the current rate of 13.9% per annum should have yielded a return on investment to a retiree of N695,000.00, and when divided by the monthly payment, a retiree gets N57,900.00, but instead N26,000.00 is paid, resulting in an assumed shortfall of N31,900.00 because retirees have no option to invest,” he lamented.
Worried by the development, the House mandated the National Pension Commission to investigate the complaints of former employees who have been negatively impacted by the administration of pension funds, ensure strict enforcement of the law, and design a framework to guide against infractions of the Pension Act, 2014, in furtherance of the anti-corruption stance of the present government.
To this end, the House mandated its Committee on Pensions to invite the National Pension Commission and Chief Executives of the PFAs to brief it on the activities of the Pension Fund Administrators (PFAs) as it concerns the investment of the Retirement Savings Account, benefits accruing to the employees upon retirement, and the investment portfolio of the Retirement Savings Funds and report back within four weeks for further legislative action. (TRIBUNE)
