One of the major highlights of a bill to repeal the Pension Reform Act, 2004 and replace it with a new legislation is the merger of the old and new pension schemes by the Pension Transitional Arrangement Department. NIKE POPOOLA provides an insight into the arrangement
Worldwide, the pension system is the mechanism introduced by different governments to ensure that workers are not abandoned to their fate when they are no longer in active service, but instead can earn regular income in their vulnerable old age.
Eight years ago, the Pension Reform Act, 2004 was officially introduced in Nigeria to ensure the payment of retirement benefits to employees in the public service of the federation and the private sector.
The Contributory Pension Scheme, which the Act introduced, operates separately from the Pay As You Go old pension scheme, which is fraught with different problems that have continued to subject pensioners to undue hardship of non-payment of pension stipends.
Currently, the PRA 2004 is in the process of being repealed by the National Assembly and the PRA 2013 will soon be enacted.
The ultimate aim of the proposed law is to find a lasting solution to problems in the old scheme and ensure centralisation of pension management in the country.
An important area in the 2004 law but which has not been implemented is the centralisation of pension management in the country.
Section 35(1) of the PRA 2004 provides that the National Pension Commission should supervise and regulate all the pension departments and offices in the Federal Civil Service.
However, the Federal Government’s pension departments/offices have refused to come under the regulation of PenCom contrary to the provision of the PRA 2004.
In fact, the PenCom, had in the recent past complained that the operations of the pension offices was generating regulatory concerns for it, particularly, in ensuring compliance with the provisions of the law.
However, the new Head of Service of the Federation, Alhaji Goni Aji, said the government was already addressing the pension problems in the country.
“We are addressing the areas that went wrong in the management of pensions in the last decade or two. And this has been an issue related to the lack of proper central coordinating office for all pension activities of the Federal Government,” he said.
According to him, the office of the Head of Service manages one arm out of the eight departments dealing with federal civil service pensioners.
Aji said his office was fast-tracking the takeoff of the Pension Transitional Arrangement Department under PenCom.
When the department commences operation, he said there would be a coordinated effort in providing lasting solutions to the problems of pensioners in the country.
The HOCSF observed that since PenCom commenced operations, it had not been associated with any of the controversies threatening the old pension scheme.
“I have the belief that if the people in PenCom are the crop of people that are going to be involved in managing the PTAD, for the first time, I think we are going to get it right,” Aji said.
The Acting Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, said under the amendments introduced by the PRA 2013 bill, there would be a restructuring of the system of administration of pensions under the Defined Benefits Scheme.
According to her, Sections 42 to 49 of the bill make provisions for this.
She observed that the implementation of the provisions of the PRA 2004 dealing with the establishment of PTADs for the administration of pension under the Defined Benefits Scheme had been challenging due to some ambiguities in the provisions.
Anohu-Amazu said a joint resolution of the Senate and House of Representatives harped on the need for government to put an end to the era of impunity in the Civil Service Pension Department of the Office of the Head of Service and other instances of widespread corruption in the various pension departments.
She added the proposed PRA 2013 bill would make provisions for enhanced regulatory authority and efficiency of PenCom to provide greater oversight, and the repositioning of the Pension Transition Arrangement Directorates.
The acting PenCom boss said that would ensure greater efficiency and accountability in the administration of the defined benefits scheme such that payment of pensions would be made by the Accountant-General of the Federation directly into pensioners’ bank accounts in line with the current policy of the Federal Government.
The Chairman, Joint Committee on Establishment on Public Service Matters and Management of Pension Funds, Senator Aloysious Etok, said there was the need to reposition the pension industry to improve the lives of Nigerian pensioners.
He also said that as the PRA was being reformed, there was the need to strengthen PenCom’s role to be able to take its position in the scheme of affairs of the pension system.
According to him, there are provisions to ensure that pensioners under the old pension scheme are covered by the PTAD to ensure centralisation of pension management in the country