We can’t loan FG from pension fund assets ― PenCom

The Acting Director-General, National Pension Commission (PenCom), Mrs Aisha Dahir-Umar, has said that the commission cannot loan the Federal Government from the accrued Pension Fund Assets to fund investment, infrastructure or national projects.

The PenCom boss, who was speaking at the 2019 NLC National Leadership Retreat in Enugu hinted that the commission has no money to lend any state, even as she disclosed that the Pension Fund Assets had grown to N9.44 trillion.

There have been reports and speculations that the Federal Government wants to borrow from the Pension Fund Assets for investment, and fund some projects as well as put in place some notable infrastructures, while the commission was also said to have promised to loan Ebonyi State Government part of the fund.

Labour, especially the NLC has consistently kicked against the plan in the last two years, and when the opportunity was provided during the NLC leadership retreat in Enugu, the Labour leaders sought clarification from PenCom.

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However, the acting director-general, who was represented by the Head, Internal Audit Department, PenCom, Mr Peter Ekwealor, stated that the commission has no such capacity, adding that the commission has no right to give the money to anybody as it was not even with them.

Responding to the question on both Federal Government and Ebonyi State borrowing from the Pension Fund Asset, she said: “I am not aware of that, that the Federal Government is trying to borrow money from PenCom. PenCom does not have that kind capacity, we don’t have the right to give money to anybody. If you understand how the whole thing works, you know that the money is not even with PenCom in the first place. Also, we didn’t promise Ebonyi State Government any loan.”

In her presentation, the acting director-general said the Pension Fund Assets had grown to N9.44 trillion, adding that the numbers of contributors have also grown to 8.79 million with high growth potentials for the scheme.

Giving the update on the implementation of the Contributory Pension Scheme (CPS), she said: “It is appropriate to provide implementation updates at all engagements with organized Labour. The modest milestones of the CPS should instil confidence that the Pension Reform remains steadily on course despite some passing challenges. As at August 2019, the number of pension contributors that is membership of the Retirement Savings Account (RSA) Fund has grown to 8.79 million. There are high growth potentials for the CPS with more registrations expected from the states as well as the private and informal sectors.

“With the launching of the Micro Pension Plan in the first quarter of 2019, it is expected that the plan will serve as a major driver of expanding coverage of the CPS in Nigeria. Furthermore, Pension Fund Assets had grown to N9.44 trillion over the same period. It should be noted that Pension Asset growth is made up of monthly pension contributions for the RSA Funds and funds injected by scheme sponsors in the case of Closed Pension Fund Administrators (CPFAs) and Approved Existing Schemes (AESs) as well as income generated from investment.”

She added: “On benefits administration, a total of 297,019 retirees are receiving pension under the CPS as at 31 August, 2019. About 226,350 retirees who are receiving pension under the programmed withdrawal were paid the sum of N586.25 billion as lump sum and N9.64 billion as monthly programmed withdrawals.

“Whereas, about 70,669 retirees on Annuity were paid N93.79 billion as lump sum; N382.63 billion was paid to the Insurance companies as premium for the Retiree Life Annuity with a monthly pension of N3.82 billion. In addition, N183.79 billion was paid as death benefits to the beneficiaries of 58,434 deceased contributors.”

The PenCom acting director-general said compliance by states was one of the strategic initiatives towards expanding coverage of the CPS, adding that as at August this year, 25 states of the Federation including the FCT had enacted laws on the Contributory Pension Scheme (CPS); six states were at the bill stage; while five states had embarked on pension reform other than the CPS.

Accordingly, she pointed out that the Commission had adopted different strategies in promoting CPS in States and also enhances their capacities in ensuring compliance.

These strategies, according to her, include direct engagement of stakeholders at all levels, provision of technical support and the conduct of sensitization and enlightenment workshops for state government officials, labour unions and employees, amongst others.

In addition, she stated that the Commission’s Regulation on Investment of Pension Fund Assets has made non-compliant States ineligible for access to pension funds in any development bonds they may issue.