Pensioners to Receive Payment, a Week after Retirement, PenCom Assures

*Contributory pension fund hits N14.5trn 

*Lawmakers tackle commission over rising operating cost

Sunday Aborisade and Juliet Akoje in Abuja

The National Pension Commission of Nigeria  (PenCom) said yesterday  that federal pensioners would henceforth receive their entitlements, a week after retirement.
The agency also declared that pension fund, currently at N14.5 trillion was not idle but had been invested appropriately.
The Executive Chairman of PenCom, Mrs. Aisha Dahiru Umar stated these in her submission to the Senate Committee on Finance currently engaging government agencies on proposals for the 2023 – 2025 Medium Term Expenditure Frame Work (MTEF) and Fiscal Strategy Paper (FSP).

The PenCom boss said backlog of accrued pension payments to pensioners had been almost cleared by the federal government.
She said within the last 17 years, the federal government had been paying N49 billion per month to offset the backlog of pension.
She said, “Late payment of pension to pensioners will be a thing of the past very soon as required steps in that direction, have been taken by the federal government whose retirees are affected.”

She said: “By the provisions of the Establishment Act, all income earned from investment earned from the Retirement Savings Account (RSA) are credited back to the RSA of the contributors. Nobody takes a single kobo from it. However, the Commission and the pension operators are allowed to charge fees on the fund under management and that is what we survive on.
“For example, the total asset under management is now N14.5 trillion made up of three funds. One is the Retirement Savings Account Fund, the other is the Closed Pension Fund Asset and the Assets in Existing Scheme.

“Out of the N14.5 trillion, the RSA fund is about N11 trillion, the CPFA has N1.5 trillion and the AES has about N1.4 trillion. These monies are in the account of contributors. It is not kept by PenCom, it is not kept by the PFAs. It is not anywhere but in the account of the contributors, just like the commercial banks.
“We charge fees as follows. PenCom charges on the RSA fund 0.2 percent, while the PFAs charge 1.2 percent and the PSCs charge 0.25 percent. Those percentages are charged on a daily basis and then divided by 365 days because if you wait to do that the end of the year, it is going to be higher and the RSA account holders will be cheated.”

She added: “The Commission is mandated by the pension reforms act to charge these fees to enable it generate enough revenue to meet its personnel and operational cost. It is also to rid the government of the burden of funding the Commission.
“We also charge fine which we collect from the operators when they break certain rules. We use what we call a sanction regime to guide us on what they should pay when they break the rules. There are also one-off charges like licensing fees which N500,000. All these monies are paid into CBN account.”

However, the lawmakers who spoke during the scrutiny of the Commission’s accounts, demanded for details of total sum of N14.594 billion spent on personnel cost for 500 staff as well as N2.3 billion end of the year benefits, out of which the sum of N12.02 billion was for staff salary and N2.5 billion for other staff costs.
Documents had shown that the Commission’s personnel cost rose from N12 billion in 2021, to N17 billion in 2022 and was projected to hit N21.5 billion in the 2023 budget proposal submitted to the Budget Office.

The lawmakers who demanded for the Commission’s audited accounts also queried the N1.715 billion on administrative expenses.

The lawmakers also expressed displeasure over the sum of N1.1 billion remitted out of the N4 billion operating surplus declared by the Commission, while the sum of N20.8 billion was generated in 2021.

The lawmakers who accused PENCOM of breaching extant financial regulations and the provisions of the 1999 Constitution (as amended), argued that as a fully funded agency, the Commission is under obligation to render its accounts to Accountant General of the Federation, Auditor General of the Federation as well as Fiscal Responsibility Commission in line with extant laws.

Speaking earlier, Dahiru-Umar disclosed that the Commission incurred expenditure worth N16.31 billion in 2021 and recorded N4.45 million as operating surplus.

To this end, the Committee which issued a seven-day ultimatum to the Commission to submit relevant documents for further legislative scrutiny, also directed the Fiscal Responsibility Commission to submit the report on the reconciliation with various Ministries, Departments and Agencies within one week.