PENCOM BOSS ALLAYS FEARS OVER CLAIMS' PAYMENT

WITH an asset base of N1.9 trillion for the nation's pension scheme, Nigerians have been assured that there would not be any default for pensioners who are presently covered under the scheme, the Director-General of National Pension Commission (PenCom), Alhaji Mohammad Kabir Ahmad, has said.

The PenCom boss, at the flag-off of the contributory pension scheme for the members of the National Union of Road Transport Workers (NURTW) yesterday, at Arewa House, in Kaduna State, said that 'there is confidence in the industry and to that extent, we believe that progressively, the industry has been growing at a much faster rate, perhaps than in any other country'.

He argued that those who are expressing fear on the ability of the pension scheme to sustain the present momentum should bury their thought, saying that 'we have consistently informed Nigerians that this is a scheme that emphasises safety of pensioners' fund and we have, both in our conduct and in terms of our regulations, ensured that whatever anybody contributes, he gets his money as and when due'.

According to him, 'we have identified some key issues in terms of safety, because safety is an important issue for us and I can assure you that as at today, we have over 30, 000 Nigerians that have retired under the new scheme and are getting their benefits as and when due.

'Incidentally, there are no misgivings, given the trend. As at today, we have about 4.5 million Nigerians signing unto this new scheme. We have launched a scheme for the road transport workers and their membership is about two million and if you assume that that number is going to register, obviously, you are looking at a figure of about 8 to10 million'.

'We've had the meltdown in the capital market between 2007 and 2008. If you closely watch the development in the capital market, we have gone beyond that. Pension assets are long-term investment and that means it goes on for a long period. If you are a long-term investor or indeed, if you are an institutional investor, short time fluctuations do not sometimes matter and to that extent, even though there was fall in terms of values of shares, the pension industry has not suffered that much because substantial part of the pension assets was not invested in the capital market.

'Secondly, as long time investors, most pension fund administrators have not sold off their investment and so has not realize their unrealised losses. But beyond that today, the capital market is coming back and you will notice that share prices have been going up. It is essentially a matter of time and to that extent, we are not so much bothered'.

'The pension assets is in the country currently is about 1.9 trillion. In terms of investment, what we have done as an industry is to issue what we called investment regulations, which clearly spelt out how pension assets can be invested. We posted that on our website and all Nigerians had the opportunity to respond on the regulations and based on the response, we have just issued a revised regulation in December last year.

'This, we have gone beyond just having a single fund and are going to have what we called a multiple fund. What that means is that you can decide to keep your money in any of the funds. For example, if you are much older person, you will not be asked to keep money in what we called floating rate and you money is likely to be in fixed rate essentially because this is an evolving system and we want to start from the basis and very soon, contributors will have choice as to where their funds will be invested'.

Speaking on compliance by various companies and other organisations in the country, the NPC boss noted said: 'What we have done so far is to introduce what we called voluntary compliance, using moral persuasion. 'We have indeed sanctioned a number of contributors and have published names of employers that have defaulted.

'Since last year, we have started the process of taking legal action against defaulting employers. The significance of today's event is that we are having self employed Nigerians joining the system. The law says if you are an employer and you have five employees and above, you are expected to join the scheme. Here we are today, having individuals joining the scheme.'

This is the first time under this new scheme that we are having about two million Nigerians who said they will join the scheme. The benefit for them is that they are saving for their retirement. In this country, we have people who have worked for 20 to 30 years and at the end of the day, they have nothing'.

'Beyond that, the scheme has what you call a minimum pension guarantee. The details are yet to be worked out, but it says that if you contribute for a specific period of time, when you are retiring, even if you pension has not reached the minimum pension guarantee, you will be paid a minimum pension. That in essence is saying that generally, Nigerians, wherever they are, if they save for pension, they will have something to fall back on. So, it is a significant day for the pension industry today.

'We have paid close to about N90 billion to those who have retired and on a monthly basis, we are paying about N100 million.'