The National Pension Commission (PenCom) has projected that by the end of this financial year, the total pension assets under the Contributory Pension Scheme (CPS) will rise to N22 trillion.
The Director-General, Omolola Oloworaran, who made the projection during a media chat on Thursday in Abuja, disclosed that as at October 31 this year, a total of 10.53 million employees had registered as contributors to the scheme with a total asset value of N21.92 trillion.
The industry expert, in her keynote address delivered at the 2024 Media Conference with the theme “Tech-Driven Transformation: Shaping the Pension Landscape”, spoke on the CPS’ implementation over the past years and highlighted its strategic importance to national development, especially for retirees and investment channel to support government’s infrastructure development agenda for Nigeria’s sustainable socioeconomic development.
Despite the immense benefits of the scheme, the Director-General described the current monetary and fiscal policy challenges, especially the surging inflation and naira devaluation, negatively impacting on the real value of pension funds, thereby reducing contributors’ purchasing power and raising the cost of using the assets for critical infrastructure projects.
She noted: “However, the economic realities of 2024 and preceding years present unique challenges. High inflation, the devaluation of the naira, and the lingering effects of unorthodox monetary policies have eroded the real value of pension funds, impacting contributors’ purchasing power.
“To address these challenges, PenCom has initiated a comprehensive review of the Investment Regulations, focusing on diversifying pension fund investments into inflation-protected instruments, alternative assets, and foreign-currency denominated investments. Our goal is to safeguard contributors’ savings and ensure resilience against future economic volatility”, the Director-General added.
On the delays in the payment of retirement benefits, Oloworaran hinted that the commission was collaborating with the Federal Government to ensure that retirees from treasury-funded Ministries, Departments, and Agencies (MDAs) no longer go through hardships before their CPS’ entitlements are paid as of when due to them.
She assured: “Recently, N44 billion was released under the 2024 budget appropriations to settle accrued pension rights for retirees from March to September 2023. Moving forward, we are working with the Federal Government to institutionalise a sustainable solution, ensuring retirees receive their benefits promptly and without undue stress.”
Oloworaran, who also spoke about the commission’s moves towards a holistic review of the investment regulations in collaboration with the Securities and Exchange Commission (SEC), to safeguard contributors’ savings, explained that the Micro Pension Scheme would soon be rebranded by leveraging technology to simplify savings procedures such that all Nigerians, especially those in the informal sector, could use it for their post-retirement benefits.
Expatiating on other initiatives being undertaken by the commission’s management to transform the CPS, she recalled that an e-application portal for Pension Clearance Certificates was launched last October to enable contributing companies apply for and receive certificates online.
According to her, through the e-portal, 38,528 PCCs have been issued as part of the commission’s efforts to support ease of doing business for corporates and ensure their compliance with the CPS guidelines.
Similarly, she told the participants at the conference that a Pension Industry Shared Service Initiative is being worked by the commission for implementation soon with a view to digitalizing pension contributions and remittances, resolving discrepancies usually associated with incomplete remittance details and ensuring seamless processing of Retirement Savings Account contributions.
In his paper presentation at the event, the Chief Executive Officer of the Pension Fund Operators Association of Nigeria (PenOp), Mr. Oguche Agudah, who commended the PenCom management for proactively responding to the emerging issues in the pension industry, highlighted the challenges being faced by PFAs in pension remittance, including a lack of standardization of the processes, adding that a new, tech-driven system for remitting pensions is being developed to resolve these issues.
Specifically, the industry expert said that PenCom had consistently been engaging pension service solution providers through workshops, seminars and other fora to facilitate seamless pension remittances and ensure all platforms meet industry standards.
Agudah expressed optimism that the new approach of the commission’s management would enhance accuracy, efficiency, transparency, and timeliness in crediting Retirement Savings Accounts, while also reducing administrative bottlenecks.
This year’s conference, themed “Tech-Driven Transformation: Shaping the Pension Landscape,” underscored the pivotal role of technology in revolutionizing Nigeria’s pension industry.
