Senate proposes investing N2.9 Trillion pension fund

By The Rainbow

The Senate said on Tuesday that it was taking steps to channel the N2.9 trillion pension fund into investments to generate tangible benefits for the contributors and the nation.

This followed the second reading of the Bill for an Act to repeal the reform Act and enact the pension reform Act 2013 at the floor of the Senate.

The Senate Leader, Victor Ndom-Egba, in his lead debate said the N2.9 trillion accumulated pension funds would be used for financing infrastructural projects, job creation and other profitable national ventures.

According to him, the Bill when passed into law would improve payment of retirement benefits, timely remittance of pension and correct the defects in the extant bill.

The Senate President David Mark huge sum of  N2.94trillion that accrued to the pension fund was not yielding any direct benefit to the nation's economy due to poor management.

In the proposed law, employees contribution will be reviewed upwards.

The Federal Government's and the Federal Capital Territory's contribution would be charged on the Consolidated Revenue Fund (CRF) of the Federation and that of the FCT respectively.

Mark noted that the present administration of the nation's pension fund, was superintended over by people without the requisite experiences.

He said, 'I think the problem we have is that we have all sorts of rookies, people who have no idea about managing funds, let alone very huge pensions fund, going to manage our pension fund; and I think it is a very specialised area where you cannot just wake up tomorrow morning and be appointed to manage the pension fund, you will mismanage it.

'That is what I suspect has happened. The national budget is N4.9trillion; and we have money in the pension fund up to N2.9trillion; so you can imagine the amount of money at the disposal of few individuals who are not properly supervised, who had no training in the management, and who dipped their hands into it as and when they feel like.

'I think the essence of this reform is to make sure that people who are properly trained are put in charge of the pension fund and properly managed. There is hardly any pensioner in this country who is not going through hell.

'He makes all his contributions, when it is time for him to receive his pensions, then they don't recognise him anymore. When he was paying the contributions he is a very lovely boy or girl, he is a welcome person, everybody is petting him until he retires and when he should now enjoy his pension, then the nation forgets him.'

Mark also insisted that in withdrawing funds from the consolidated revenue fund of the federation and the inclusion of states would require an amendment of the Constitution, since the National Assembly don't make laws for the states.

He stated that the said that the issue of whether employees should pay more should be left to experts in economic matters and could be addressed at the public hearing.

Ndoma- Egba said there were inadequacies in the extant law such as non-remittances of pension contributions to the pension fund administrators by ministries, departments and agencies; delayed payment and sometimes non-payment of gratuities and pensions to retirees; under payment of retirement benefits, withdrawal of some security agencies from the scheme.

He said, , 'Corruption, misappropriation and outright embezzlement of pension funds. Even the Pension Reform Task Team set up to bring some sanity to the system and ensure that pensioners received their pensions as and when due, rather worsened their plight and ended up with confounding sleaze, corruption, degeneracy and stealing so much that the 'Team' has become a euphemism for kleptomania.'

Ndoma-Egba said the new law would cover employees of the public service of the federation, the Federal Capital Territory, states, local governments and private sector organisations with as little as three employees or less.

'Such funds can be channeled into financing infrastructural projects and creating employment opportunities. As at September 2012, the estimated accumulated pension funds stood at about N2.94trillion.

'One can only imagine the impact of such funds in the economy if channeled properly. Therefore, everything necessary should be done to strengthen and sustain the contributory pension scheme.'

The bill which was read for the second time was committed to the Senate Committee on Establishment and Public Service for further legislative work.