Enterprise Television: Healthy Compliance, Key to Continuous Development of Pension Industry- Barr. Takor
From a public sector pension deficit of N2 trillion in 2004 to a pension assets of N8.14 trillion as at July 2018, the executive director, Centre for Pension Rights Advocacy, Barrister Ivor Takor has attributed this giant stride to the National Pension Commission (PenCom) ability to build and maintain a culture of healthy compliance in the industry.
Takor, at the 3rd National Conference of the National Association of Insurance and Pension Correspondents (NAIPCO) in Lagos, said healthy compliance has not only helped the industry to stay out of trouble, but has built a reputation for the industry as being trustworthy, which has led to the continuous development of the industry.
He said, “Being a friendly regulator, PenCom exposes draft guidelines to operators for inputs before finalizing them. There is a monthly consultative fora with licensed operators and holds regular consultations with the operators “union” the Pension Operators Association (PenOp).”
Takor said Section 1 paragraph (c) of the pension reform act (2014) states that every person who worked in either the Public Service of the Federation, Federal Capital Territory, States and Local Governments or the Private Sector receives his retirement benefits as and when due.
He said the Nigeria Labour Congress (NLC), the Trade Union Congress (TUC) and Industrial Unions, whose responsibility it is to champion the cause of improvement of the welfare of workers and pensioners, must be at the forefront of efforts to grow the industry.
“They can achieve this by adopting both collaborative and preventive approaches. The labour movement should ensure that employees open Retirement Savings Accounts (RSAs) and understand salient sections of the Act that need their attention.
“They should put pension issues as principal items for discussion/negotiations, in every meeting and negotiation with employers especially governments, engage PenCom through interactive sessions and training of union leaders including having pension desks in union offices for better interface.
“They should ensure periodic issuance of RSA statements by Pension Fund Administrators to account holders; have Annual National Pension Conferences, where workers views are articulated and expressed and act as whistleblowers on pension matters,” he added.
The managing director said the pension industry remains the most rapidly growing industry in the country and will remain so for a long time, adding that this position will be strengthened when the micro pension targeted at getting the self-employed in the informal sector to key into the Contributory Pension Scheme commences.
Issues militating and may continue to militate against the growth of the industry, according to Takor are, absence of reliable data on employers in the private sector; weak economy; dearth of investment outlets and lack of confidence in government promoted schemes.
While the following are some issues that must be addressed by stakeholders for the continuous growth of the pension industry, Takor said commencement of the micro pension for the large informal sector; tackling of the resistance/unwillingness to remit pension contributions by employers; adequate coverage of the scheme, especially keying in by State governments and improved customer service delivery by PFAs, would surmount those militating factors.
He said, “Pension Reform Act 2014 has very greatly also developed the insurance industry. The monthly pension payment under the Life Annuity Scheme established under section 7(1)( c ) of the Act has averaged N1.7 billion as at March 2017.
“That figure is much higher now. Moreover, the total premium paid to Insurance Companies for the Group Life under section 4(5) of the Act was N170.57 billion as at March 2017. This has significantly assisted the growth of the insurance industry.”