FG may bar group exit from pension scheme

                                 PenCom

The National Pension Commission is seeking the support of the Federal Government to deny approval to any sector desiring to opt out of the Contributory Pension Scheme.

It was gathered that the commission took this stance after some groups opted out of the scheme with others making attempts to do the same.

PenCom is, therefore, seeking legislative support to empower it to take more decisive action over all agencies responsible for pension management in the country and unify all the different pension schemes under the CPS.



It was gathered that while the CPS was being administered by the Pension Fund Administrators, PenCom might grant any sector bent on exiting the scheme the option to operate under a closed PFA.

After the State Security Service and the Nigerian Army had opted out of the scheme, the Nigeria Police Force was reported to have concluded plans to pull out of the CPS, while other paramilitary groups are considering taking a similar path.

PenCom has, however, waded in to prevent further break away, which it considers a major threat to the pension scheme.

Following the efforts of the Police to quit the CPS, PenCom held crucial meetings with the police management over the matter and three options were proposed as a way out.

The Police were given the options to either operate a closed PFA, an open PFA or an approved existing scheme, which must be regulated by PenCom.

Section 35 (1) of the Pension Reform Act, 2004 stipulates that the commission should supervise and regulate the pension departments and offices.

However, in a presentation to the Senate, PenCom said the operations of the pension offices had over time generated regulatory concerns for it, particularly in making them to comply with the provisions of the PRA 2004.

Because the pension offices had operated as appendages of their parent ministries, departments and agencies with co-mingled administrative and operational structures, PenCom said the arrangement weakened the regulatory and supervisory oversight of the commission over them due to lack of centralisation of the oversight functions.

PenCom stated, “This has resulted in a situation where the commission is unable to exert supervisory control over the pension offices as they have little regard for the commission’s supervisory role over them in a clear violation of sections 30 to 38 of the PRA 2004.

“This is in spite of the fact that the commission and the offices have jointly worked out a supervisory framework and issued regulation on the conduct of the offices.”

The commission complained that the Military Pension Board, which hitherto rendered returns consistently, stopped doing so since June 2011.

To address the problems associated with the pension offices under the old scheme, a Pension Transitional Arrangement Department, an autonomous agency that will co-ordinate the activities of the existing pension offices, was established in accordance with Section 30(1) of the PRA 2004.

“The PTAD will be regulated and supervised by PenCom as provided in Section 30(2) & (4) of the PRA 2004. Consequently, all the six pension offices should report directly to the PTAD,” the commission said.