Nigeria’s paramilitary agencies have commenced moves to take over the management of their own pensions, away from the existing Pension Fund Administrators (PFAs) who had managed the scheme since the Pension Reform Act 2004 came into being over 10-years ago, BusinessDay findings reveal.
A source close to the industry said the paramilitary agencies including the Nigerian Customs Service, Nigerian Prisons Service and the Nigerian Immigrations Service, driven by desperation to manage their own pensions, are lobbying to take their assets away from existing PFAs.
They are consequently pushing a Bill at the National Assembly for this purpose, just as the military and the police did a few years ago and got licenses to manage their own pensions.
Police Pension Mangers Limited, which was created following the exit from already existing PFA’s, has already received over N200 billion and another N100 billion is expected before the end of the year, being accumulations of police officers pensions contributed with existing PFAs, before it was granted license. This amount ,according to industry watchers, is capable of making the Police PFA the second largest in the industry.
Analysts who reacted to the development last night, said pushing a legislation to exit from existing PFA’s is uncalled for, since there has not been any known case of fraud or mismanagement in CPS since it’s commencement over ten years ago.
“It is simply desperation to be in control, nothing more than that, and it is not good for the industry.”
A CEO of one of the PFA’s, who did not want to be named, said, “Don’t forget that existing PFA’s have used their entrepreneurial skills and other resources to develop these accounts, and so it is unfriendly to be compelled to transfer these monies and assets just like that.
“I believe the government and the legislators would use their wisdom to know that it would impact negatively on the pension industry because people cannot continue to push for exit all the time.”
The industry chief faulted the claim of the agencies that they sought to quit because of security fears. “Everybody’s details, including the army, the police or any other force, are with the banks, through BVN. If you are a soldier or whatever profession you belong to, you gave it to the bank, so why has that of pensions become different. The legislators should use their wisdom, the CEO advised.
Susan Oranye, executive secretary, Pension Fund Operators Association of Nigeria (PenOp), who could not confirm or deny the information, said PenOp would officially react to the issue at the appropriate time.
Meanwhile, the National Assembly is planning a Public Hearing/ Retreat for pension operators on Tuesday in Abuja, with a yet unknown agenda.
However, industry players suspect this Bill may be the subject of discussion at that meeting.
As at the end of February 2016, the Country’s Pension Fund Assets under management stood at N5.3 trillion, while the number of contributors has risen to 6.7 million.
The objective of the Pension Reform 2004 as amended in 2014 is to ensure that every person who worked in the public service of the federation, federal capital territory, or private sector, receives his or her retirement benefits as and when due. It also seeks to assist improvident individuals by ensuring that they save, in order to cater for their livelihood during old age; and establish a uniform set of rules, regulations and standards for the administration and payments of retirement benefits for the public service of the federation, federal capital territory and the private sector”.
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