[vc_row type=”vc_default” full_width=”stretch_row_content_no_spaces” css=”.vc_custom_1500547593342{padding-right: 100px !important;}” el_class=”noPaddinRow”][vc_column width=”1/6″ el_class=”noPaddingLeft” offset=”vc_hidden-md vc_hidden-sm vc_hidden-xs”][vc_raw_html]JTNDZGl2JTIwY2xhc3MlM0QlMjJtYWluLXN0cmlwJTIyJTNFJTBBJTNDZGl2JTIwY2xhc3MlM0QlMjJibHVlLXN0cmlwMCUyMiUzRSUzQyUyRmRpdiUzRSUwQSUzQ2RpdiUyMGNsYXNzJTNEJTIyYmx1ZS1zdHJpcDElMjIlM0UlM0MlMkZkaXYlM0UlMEElM0NkaXYlMjBjbGFzcyUzRCUyMmJsdWUtc3RyaXAyJTIyJTNFJTNDJTJGZGl2JTNFJTBBJTNDJTJGZGl2JTNF[/vc_raw_html][/vc_column][vc_column width=”5/6″ el_class=”justifyText” css=”.vc_custom_1530543281603{padding-right: 310px !important;}” offset=”vc_hidden-md vc_hidden-sm vc_hidden-xs”][vc_empty_space height=”50px”][vc_row_inner el_id=”newsletters”][vc_column_inner width=”1/6″][/vc_column_inner][vc_column_inner width=”2/3″][vc_custom_heading text=”Nigeria’s Copyrights Regime: A New Dawn” font_container=”tag:h1|font_size:22|text_align:justify|color:%236699cc|line_height:1.8″ use_theme_fonts=”yes”][/vc_column_inner][vc_column_inner width=”1/6″][/vc_column_inner][/vc_row_inner][vc_empty_space height=”25px”][vc_column_text]Prior to the emergence of the present pension regime, Nigeria’s pension scheme was largely in a state of flux. Most schemes were under funded or unfunded; there was weak and inefficient pension administration; most workers in the private sector were not covered by any form of retirement benefits and cases of unsustainable outstanding pension liabilities were rife. Infact pension liabilities of the government at the inception of the Pension Reform Act (PRA) in 2004 was estimated to be about N2 trillion. Financial forecasts projected that in a few years to come, pension obligations would exceed the salary of active workers. This was an economic scourge waiting to happen and its prognosis was not encouraging. Hence, the need for Government intervention through the instrumentality of the PRA 2004.
- What is the reform agenda?
A wholistic rendition of the pension reform agenda includes the following:- Emergence of a new scheme where employers and employees (public and private sector) are obligated to contribute 7.5% each of the emoluments of the employee into a Retirement savings account (RSA). This is a radical departure from the erstwhile regime of defined benefit which was based on how long the employee had worked and the last position he occupied.
- Ensuring that every employee receives his retirement benefits as and when due.
- Stemming the growth of pension liabilities.
- Establishing uniform rules, regulations and standards for administration of pension matters
- Securing compliance for evolved regulations.
- Restriction and monitoring of pension fund investment. Investment instruments in which pension funds can be invested must be rated to ensure asset quality. For example, investment in the Banking industry must be in Banks with a minimum of ‘A’ rating, and investment in Initial Public Offers must be in companies with a minimum of `AAA rating.
- Any institutional framework for management and custody of pension assets?
Of course, there is. The PRA 2004 devised the following framework:- Pension Fund Administrators (PFA)-They are responsible for opening and administering Retirement Savings Account (RSA) for every employee and appoint the Pension Fund Custodians. PFAs also invest pension fund assets and administer retirement benefits.
- Pension Fund Custodians (PFC)- PFCs receive the total contributions and holds them in trust for the employees. This is to ensure the safe custody of pension funds as neither the PFAs nor PFCs can misappropriate the funds without detection under the present state of affairs.
- National Pension Commission (PENCOM)-This is the apex body set up to regulate and supervise pension schemes. Her oversight functions include:
- Receiving and investigating complaints against any PFC, PFA or employer.
- Approve, license and supervise PFAs, PFCs, and other institutions relating to pension matters.
- Formulate, direct and oversee the overall policy on pension matters in Nigeria.
- Maintain a national data bank on pension matters.
- Transition Challenges.
Despite the laudable framework above, the reform train has been besieged by certain challenges that threaten to derail it. We therefore must make mention of them. They include:- General misconception and knowledge gap about the new scheme.
- Initial reluctance of employees to register with PFAs.
- Widening coverage especially in the informal businesses in the private sector.
- Quantifying and transferring legacy funds and assets hitherto managed by employers, insurance companies and fund managers.
- Lack of adequate capacity building in the new pension industry.
- Intensified public education and enlightenment.
- Strong support and political will by the government.
- Effective collaboration between all stakeholders i.e. PFCs, PFAs, PENCOM, employee and employers.
- Development of a comprehensive accounting standard for retirement benefit.
- What are the opportunities inherent in this Pension revolution?
With total pension fund assets hitting over N648.9 billion as at 31st August 2007, we dare say the opportunities are boundless. Presently, 50% of pension fund assets in Nigeria have been invested in quoted stocks and money market instruments. Beyond this, Nigerian pension funds can provide finance to the real sector through acquisition of corporate bonds and long tenured money market instruments that allow Banks to provide long term credit to the corporate sector. Furthermore, Nigeria’s pension fund assets can be invested in infrastructural bonds issued by credible Nigerian companies under Public Private Partnerships to cure infrastructural deficits in the public sector. All these will help rejuvenate the macro and micro levels of the economy by providing long term credit in the financial market and repositioning Nigeria as an economic power house in Africa.
More than enough reasons to support the pension reforms you may say…
DETAIL calls it a win-win option…!
[/vc_column_text][/vc_column][/vc_row][vc_row type=”vc_default” full_width=”stretch_row_content_no_spaces” css=”.vc_custom_1500547593342{padding-right: 100px !important;}” el_class=”noPaddinRow”][vc_column el_class=”noPaddingLeft” offset=”vc_hidden-lg vc_hidden-xs”][vc_raw_html]JTNDZGl2JTIwY2xhc3MlM0QlMjJ0YWItbWFpbi1zdHJpcCUyMiUzRSUwQSUzQ2RpdiUyMGNsYXNzJTNEJTIydGFiLWJsdWUtc3RyaXAwJTIyJTNFJTNDJTJGZGl2JTNFJTBBJTNDZGl2JTIwY2xhc3MlM0QlMjJ0YWItYmx1ZS1zdHJpcDElMjIlM0UlM0MlMkZkaXYlM0UlMEElM0NkaXYlMjBjbGFzcyUzRCUyMnRhYi1ibHVlLXN0cmlwMiUyMiUzRSUzQyUyRmRpdiUzRSUwQSUzQyUyRmRpdiUzRQ==[/vc_raw_html][vc_empty_space height=”25px”][vc_row_inner][vc_column_inner width=”1/6″][/vc_column_inner][vc_column_inner width=”2/3″][vc_custom_heading text=”Nigeria’s Copyrights Regime: A New Dawn” font_container=”tag:h1|font_size:22|text_align:justify|color:%236699cc|line_height:1.8″ use_theme_fonts=”yes”][vc_column_text]Prior to the emergence of the present pension regime, Nigeria’s pension scheme was largely in a state of flux. Most schemes were under funded or unfunded; there was weak and inefficient pension administration; most workers in the private sector were not covered by any form of retirement benefits and cases of unsustainable outstanding pension liabilities were rife. Infact pension liabilities of the government at the inception of the Pension Reform Act (PRA) in 2004 was estimated to be about N2 trillion. Financial forecasts projected that in a few years to come, pension obligations would exceed the salary of active workers. This was an economic scourge waiting to happen and its prognosis was not encouraging. Hence, the need for Government intervention through the instrumentality of the PRA 2004.
- What is the reform agenda?
A wholistic rendition of the pension reform agenda includes the following:- Emergence of a new scheme where employers and employees (public and private sector) are obligated to contribute 7.5% each of the emoluments of the employee into a Retirement savings account (RSA). This is a radical departure from the erstwhile regime of defined benefit which was based on how long the employee had worked and the last position he occupied.
- Ensuring that every employee receives his retirement benefits as and when due.
- Stemming the growth of pension liabilities.
- Establishing uniform rules, regulations and standards for administration of pension matters
- Securing compliance for evolved regulations.
- Restriction and monitoring of pension fund investment. Investment instruments in which pension funds can be invested must be rated to ensure asset quality. For example, investment in the Banking industry must be in Banks with a minimum of ‘A’ rating, and investment in Initial Public Offers must be in companies with a minimum of `AAA rating.
- Any institutional framework for management and custody of pension assets?
Of course, there is. The PRA 2004 devised the following framework:- Pension Fund Administrators (PFA)-They are responsible for opening and administering Retirement Savings Account (RSA) for every employee and appoint the Pension Fund Custodians. PFAs also invest pension fund assets and administer retirement benefits.
- Pension Fund Custodians (PFC)- PFCs receive the total contributions and holds them in trust for the employees. This is to ensure the safe custody of pension funds as neither the PFAs nor PFCs can misappropriate the funds without detection under the present state of affairs.
- National Pension Commission (PENCOM)-This is the apex body set up to regulate and supervise pension schemes. Her oversight functions include:
- Receiving and investigating complaints against any PFC, PFA or employer.
- Approve, license and supervise PFAs, PFCs, and other institutions relating to pension matters.
- Formulate, direct and oversee the overall policy on pension matters in Nigeria.
- Maintain a national data bank on pension matters.
- Transition Challenges.
Despite the laudable framework above, the reform train has been besieged by certain challenges that threaten to derail it. We therefore must make mention of them. They include:- General misconception and knowledge gap about the new scheme.
- Initial reluctance of employees to register with PFAs.
- Widening coverage especially in the informal businesses in the private sector.
- Quantifying and transferring legacy funds and assets hitherto managed by employers, insurance companies and fund managers.
- Lack of adequate capacity building in the new pension industry.
- Intensified public education and enlightenment.
- Strong support and political will by the government.
- Effective collaboration between all stakeholders i.e. PFCs, PFAs, PENCOM, employee and employers.
- Development of a comprehensive accounting standard for retirement benefit.
- What are the opportunities inherent in this Pension revolution?
With total pension fund assets hitting over N648.9 billion as at 31st August 2007, we dare say the opportunities are boundless. Presently, 50% of pension fund assets in Nigeria have been invested in quoted stocks and money market instruments. Beyond this, Nigerian pension funds can provide finance to the real sector through acquisition of corporate bonds and long tenured money market instruments that allow Banks to provide long term credit to the corporate sector. Furthermore, Nigeria’s pension fund assets can be invested in infrastructural bonds issued by credible Nigerian companies under Public Private Partnerships to cure infrastructural deficits in the public sector. All these will help rejuvenate the macro and micro levels of the economy by providing long term credit in the financial market and repositioning Nigeria as an economic power house in Africa.
More than enough reasons to support the pension reforms you may say…
DETAIL calls it a win-win option…!
[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/6″][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row type=”vc_default” full_width=”stretch_row_content_no_spaces” css=”.vc_custom_1500547593342{padding-right: 100px !important;}” el_class=”noPaddinRow”][vc_column el_class=”noPaddingLeft” offset=”vc_hidden-lg vc_hidden-md vc_hidden-sm” css=”.vc_custom_1530543390368{padding-right: 75px !important;padding-left: 60px !important;}”][vc_raw_html]JTNDZGl2JTIwY2xhc3MlM0QlMjJ0YWItbWFpbi1zdHJpcCUyMiUzRSUwQSUzQ2RpdiUyMGNsYXNzJTNEJTIydGFiLWJsdWUtc3RyaXAwJTIyJTNFJTNDJTJGZGl2JTNFJTBBJTNDZGl2JTIwY2xhc3MlM0QlMjJ0YWItYmx1ZS1zdHJpcDElMjIlM0UlM0MlMkZkaXYlM0UlMEElM0NkaXYlMjBjbGFzcyUzRCUyMnRhYi1ibHVlLXN0cmlwMiUyMiUzRSUzQyUyRmRpdiUzRSUwQSUzQyUyRmRpdiUzRQ==[/vc_raw_html][vc_empty_space height=”25px”][vc_row_inner][vc_column_inner width=”1/6″][/vc_column_inner][vc_column_inner width=”2/3″][vc_custom_heading text=”Nigeria’s Copyrights Regime: A New Dawn” font_container=”tag:h1|font_size:22|text_align:justify|color:%236699cc|line_height:1.8″ use_theme_fonts=”yes”][vc_column_text]Prior to the emergence of the present pension regime, Nigeria’s pension scheme was largely in a state of flux. Most schemes were under funded or unfunded; there was weak and inefficient pension administration; most workers in the private sector were not covered by any form of retirement benefits and cases of unsustainable outstanding pension liabilities were rife. Infact pension liabilities of the government at the inception of the Pension Reform Act (PRA) in 2004 was estimated to be about N2 trillion. Financial forecasts projected that in a few years to come, pension obligations would exceed the salary of active workers. This was an economic scourge waiting to happen and its prognosis was not encouraging. Hence, the need for Government intervention through the instrumentality of the PRA 2004.
- What is the reform agenda?
A wholistic rendition of the pension reform agenda includes the following:- Emergence of a new scheme where employers and employees (public and private sector) are obligated to contribute 7.5% each of the emoluments of the employee into a Retirement savings account (RSA). This is a radical departure from the erstwhile regime of defined benefit which was based on how long the employee had worked and the last position he occupied.
- Ensuring that every employee receives his retirement benefits as and when due.
- Stemming the growth of pension liabilities.
- Establishing uniform rules, regulations and standards for administration of pension matters
- Securing compliance for evolved regulations.
- Restriction and monitoring of pension fund investment. Investment instruments in which pension funds can be invested must be rated to ensure asset quality. For example, investment in the Banking industry must be in Banks with a minimum of ‘A’ rating, and investment in Initial Public Offers must be in companies with a minimum of `AAA rating.
- Any institutional framework for management and custody of pension assets?
Of course, there is. The PRA 2004 devised the following framework:- Pension Fund Administrators (PFA)-They are responsible for opening and administering Retirement Savings Account (RSA) for every employee and appoint the Pension Fund Custodians. PFAs also invest pension fund assets and administer retirement benefits.
- Pension Fund Custodians (PFC)- PFCs receive the total contributions and holds them in trust for the employees. This is to ensure the safe custody of pension funds as neither the PFAs nor PFCs can misappropriate the funds without detection under the present state of affairs.
- National Pension Commission (PENCOM)-This is the apex body set up to regulate and supervise pension schemes. Her oversight functions include:
- Receiving and investigating complaints against any PFC, PFA or employer.
- Approve, license and supervise PFAs, PFCs, and other institutions relating to pension matters.
- Formulate, direct and oversee the overall policy on pension matters in Nigeria.
- Maintain a national data bank on pension matters.
- Transition Challenges.
Despite the laudable framework above, the reform train has been besieged by certain challenges that threaten to derail it. We therefore must make mention of them. They include:- General misconception and knowledge gap about the new scheme.
- Initial reluctance of employees to register with PFAs.
- Widening coverage especially in the informal businesses in the private sector.
- Quantifying and transferring legacy funds and assets hitherto managed by employers, insurance companies and fund managers.
- Lack of adequate capacity building in the new pension industry.
- Intensified public education and enlightenment.
- Strong support and political will by the government.
- Effective collaboration between all stakeholders i.e. PFCs, PFAs, PENCOM, employee and employers.
- Development of a comprehensive accounting standard for retirement benefit.
- What are the opportunities inherent in this Pension revolution?
With total pension fund assets hitting over N648.9 billion as at 31st August 2007, we dare say the opportunities are boundless. Presently, 50% of pension fund assets in Nigeria have been invested in quoted stocks and money market instruments. Beyond this, Nigerian pension funds can provide finance to the real sector through acquisition of corporate bonds and long tenured money market instruments that allow Banks to provide long term credit to the corporate sector. Furthermore, Nigeria’s pension fund assets can be invested in infrastructural bonds issued by credible Nigerian companies under Public Private Partnerships to cure infrastructural deficits in the public sector. All these will help rejuvenate the macro and micro levels of the economy by providing long term credit in the financial market and repositioning Nigeria as an economic power house in Africa.
More than enough reasons to support the pension reforms you may say…
DETAIL calls it a win-win option…!
[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/6″][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row][vc_row type=”vc_default” full_width=”stretch_row” el_class=”footerWidget”][vc_column width=”1/4″][/vc_column][vc_column width=”2/4″][vc_row_inner][vc_column_inner width=”3/4″][/vc_column_inner][vc_column_inner width=”1/4″][/vc_column_inner][/vc_row_inner][/vc_column][vc_column width=”1/4″][/vc_column][/vc_row]