Private Sector Owns 70% of N12.7tn Pension Fund, Says PENCOM

*FG to review 2014 Pension Act

Olawale Ajimotokan in Abuja

The National Pension Commission (PENCOM) has revealed that private sector workers own 70 per cent of the N12.7 trillion in the Retirement Savings Account (RSA) under the contributory pension scheme.

The Commissioner, Administration, at PENCOM, Dr. Umar Aminu, disclosed this yesterday in Abuja at a Town Hall meeting on effective pension administration in the public service organised by the Office of the Head of Civil Service of the Federation.

That was as Head of the Civil Service of the Federation, Dr Folashade Yemi-Esan, said the federal government was considering a review of the Pension Reform Act, 2014.
Aminu said the money was a contribution that belonged to 9.3 million people working in the private sector as well as the federal and state governments.

The commissioner, who stood in for the Director General of PENCOM, Aisha Dahir-Umar, put the number of private sector workers, who owned the bulk of the contribution at 5.8 million.
His remarks followed reservations against a proposed use of the pension contributions for the payment of pensions of federal government retirees.

Aminu stated, “When we talk of the N12.7 trillion I mentioned today, this money is a contribution that belongs to 9.3 million people, including people who are working for the federal government, the states and, largely, private sector.

“About 5.8 million are actually people from the private sector. The private sector owns over 70 per cent of this money because they contribute more. When we remove the state, we can see that the amount that belong to the federal government employees and contributors is generally less than 10 to 20 per cent. So we need to put this thing into perspective: that you can’t take private sector money for the public sector because when we were talking about reform initially, there were contentious issues that we were confronted with by the private sector that we were going to take their money and use it for the public sector.”

The commissioner also stated that PENCOM had not been able to carry out a review of the pension retirement benefits because it was still awaiting the 33 per cent from the consequential adjustment benefits following the implementation of the N30, 000 minimum wage. In addition, he said the commission had cleared all pension arrears up till December 2020 from the N100 billion, which was approved last month by President Muhammadu Buhari.

Speaking also at the town hall meeting, Executive Secretary, Pension Transitional Arrangement Directorate (PTAD), Dr. Chioma Ejikeme, said the directorate had fully liquidated the 33 per cent arrears for the 2010 pension increment. Ejikeme said over N7.2 billion was paid as a result of arrears and to pensioners not on payroll in addition to payment of entitlement to next of kin of verified deceased pensioners.

Meanwhile, Yemi-Esan said the federal government saw review of the Pension Reform Act, 2014, as a major task that must be accomplished. She explained that the government had received submissions from the Contributory Pensions Union of Nigeria and a number of officers urging the review to enhance the welfare of workers.

Yemi-Esan disclosed that her office had paid over N2.4 billion to over 594 beneficiaries as death benefits to the next of kin of deceased officers from the N2.5 billion released by the federal government.