By Maduka Nweke
The Pension Fund Operators of Nigeria (PenOp) has called for caution on the bill currently at the National Assembly seeking to peg pension lump sum for retirees at 75 per cent.
PenOp in its argument posited that if the law is passed, it would significantly distort the basic aim, which the new pension scheme intends to achieve. The umbrella pension operators argue that taking such high lump sum will rob retirees opportunity of keeping more money in their Retirement Saving Accounts (RSAs).
PenOp during the 2017 Annual Media Retreat for National Association of Insurance and Pension Correspondents (NAIPCO) held in Abeokuta, the Ogun State capital, through the Chief Marketing Officer, Premium Pension, Kabiru Tijjani, said the bill has scaled second reading, noting that if it succeeds it would not be in the interest of the contributors.
Tijjani also denied the allegation that Pension Fund Administrators (PFAs) compute retirees’ benefits using their discretion, insisting that operators follow strictly the template set by the National Pension Commission (PenCom).
According to him, the template set by PenCom was the same template the PFAs are using in calculating what somebody will take as lump sum, monthly pension or accrued pension.
“There is no issue of discretion at all. What PFAs use is the same template set by PenCom. The template is in such a way that if applied to a retiree, it automatically does the computation by itself. The template is very objective. There is no use of personal discretion in interpretation; if such occurs, PenCom will not take it,” he assured.
The bill sponsored by Senator Aliyu Magatakada Wamako about three months ago, among other things, seeks adjustment of some sections of the Pension Reform Act, to accommodate new provisions that could provide leverage to retirees given the delays and other difficulties they encounter in withdrawing their savings from retirement accounts.
Susan Oranye, PenOp Executive Secretary, earlier pledged the association’s commitment to ensuring security of the pension funds.
She lamented the pervading ignorance among the public, especially among those who are in control of power and national resources.
According to her, “after 13 years, we have about 7.3 million contributors out of the nation’s total population registered with CPS. We made noise of the pension funds, at N6.7 trillion, with much awareness, we can even grow this more to ensure more meaningful contribution to GDP.”