NEW PENSION SCHEME 'LL CHECKMATE SCAMS - PENCOM DG

By NKIRUKA NNOROM
DIRECTOR-General of National Pension Commission (PENCOM), Mohammed Kabir Ahmed, said that the new pension scheme will serve as a check to many malpractices going on in the commission. He made this known in an interactive session with selected Business Editors of some media houses in Lagos.

'In recent times, revelations of the massive corruption in the administration of pensions in the public sector coming out of the National Assembly's probe have by no means dealt the pensions scheme with a huge confidence blow.

In addition to the Pension malfeasance revelations on the floor of the National Assembly, reports of inability of contributors to access their funds immediately they retire are another source of concern. However, all those belong in the nascent pension scheme,' he said.

Kabir Ahmed explained that with the new Scheme also known as Contributory Pension Scheme (CPS) the complexities associated with the old Scheme will be a thing of the past, adding it would ease retirees' access to their retirement benefits.

The new scheme according to PENCOM DG 'is robust, safe and is poised to help retirees live well after their active life in employment, adding, 'To a large extent the new pension scheme has 'placed in the hands of the contributor the responsibility for the contribution that is available in the Retirement Savings Account (RSA) upon retirement.'

Continuing, he said, 'Thus, participants will have to take their destiny in their hands and there lies one of the major differences between the new system and the previous system. Another major difference is that while pensioners in the old system travel long distances to be verified, the local office of the Pension Fund Administrator (PFA) manages that level of interface without any stress, thereby removing the need for continuous verification of pensioners.'

He stated that in the new scheme, the contribution is 7.5 per cent of the consolidated (total) monthly earning, and not just of the basic salary, noting that 7.5 per cent is deducted from every participating worker, and the employer adds another 7.5 per cent monthly.

There are checks and balances in the system, and the various regulations passed by PENCOM over the years have been geared towards more openness, transparency and empowering contributors and beneficiaries of the scheme to be the major players in the pension industry, unlike in the previous era.