WELCOME ADDRESS BY CHINELO ANOHU-AMAZU, ACTING DIRECTOR GENERAL, NATIONAL PENSION COMMISSION AT THE OFFICIAL OPENING OF THE SOUTH-WEST ZONAL OFFICE OF THE COMMISSION AT NO. 88A ODUDUWA CRESCENT, GRA IKEJA, LAGOS

 

Protocol

 

I am greatly honoured to welcome you all to the official opening of the South-West Zonal Office of the Commission which is situated here in Lagos. I am particularly pleased that you accepted our invitation amidst your highly engaging schedules. We consider the presence of a large number of stakeholders at this event as a testimony to the confidence reposed in the Contributory Pension Scheme and our modest efforts at providing regulatory oversight on pension issues.

 

2. As you are already aware, prior to the enactment of the Pension Reform Act (PRA 2004), pension administration in the country was entangled in a myriad of challenges. In the public sector which operated the defined benefit Pay-As-You-Go scheme, some of the prominent challenges encountered included a lack of transparent administration of pensions which resulted in the accumulation of huge pension liabilities and inconsistent payment to retirees. In the private sector however, most employees were not covered by any form of retirement benefit arrangement. The PRA 2004 which sought to address in a holistic manner, the perennial problems associated with pensions in both the public and private sectors established the new Contributory Pension Scheme (CPS) and created the National Pension Commission (PenCom) to regulate, supervise and ensure the effective administration of pension matters in Nigeria. Central among its key objectives are to: stem the growth of outstanding pension liabilities; ensure that every person who has worked in either the public or private sector receives his/her retirement benefits as and when due; establish a uniform set of rules and regulations for the administration and payment of retirement benefits in both the public and private sectors; and promote economic growth through diversification of pension fund investment across financial and productive sectors.

 

3. Distinguished Ladies and Gentlemen, I am glad to inform you that the Commission had remained steadfast in the implementation of the CPS such that within these few years of existence some modest achievements have been realized. Foremost among such achievements is the consistent payment of retirement benefits to all employees who retired under the scheme since 2007 without the characteristic bottlenecks experienced in the past. There is also the generation of a large pool of investible funds of over N3.50 trillion invested in various financial instruments, which marks a phenomenal growth when compared with huge estimated pension liabilities in the public sector prior to the reform in 2004. Also, 5.61million contributors have been registered into the CPS since inception. Furthermore, the process of a major amendment to the PRA 2004 is currently at the final stages of consideration by the National Assembly. In addition, the Commission had recently organized an Interactive Workshop in order to acquaint Judges of the Superior Courts with the basic understanding of the CPS to enable them adjudicate on pension matters effectively. The Commission has also established a Call Centre which would be open to the public in October, 2013, in order to enhance its service delivery through an efficient complaints resolution process. Perhaps one of the significant achievements recorded by the Commission is the reason for our gathering here today, which is the establishment of Zonal Offices in all the six geo-political zones of the country.

 

4. The National Pension Commission embarked on the establishment of Zonal Offices in all the six geo-political zones of the country in a bid to decentralize its activities and bring it closer to the contributors and retirees. With our presence in the South-West Zone now, we expect all stakeholders to avail themselves of our services by visiting our office to make enquiries, lodge complaints, and seek enlightenment on the Contributory Pension Scheme. Due to our renewed focus on efficient service delivery, we seek to reduce the need for contributors and retirees to travel from various parts of the country to Abuja for the singular reason of accessing our services. In addition, our presence would facilitate closer interaction with the States’ Pension offices by assisting them to comply with the CPS. The South-West Zonal Office has a mandate to effectively extend our services to all the six states in the zone, namely; Ekiti, Lagos, Ogun, Ondo, Osun and Oyo.

 

5. Distinguished guests, I am pleased to report that States in the South-West Zone have made reasonable progress in the adoption and implementation of the CPS. Indeed, the choice of Lagos State to host our South-West Zonal office stemmed not only from its pre-eminent position as the economic nerve centre of the country but was also justified by its record of being one of the pioneers in implementation of the CPS, having enacted its law in 2007. The State had fully implemented the CPS with a total of 45,730 employees registered and pension contributions remittance of N46.50billion as at July, 2013. Furthermore, the State had issued retirement benefit bonds of N18.9billion to its retirees and these bonds have been fully redeemed and proceeds paid into the employees’ individual RSAs; while 2,242 employees from the State have retired under the Scheme as at August, 2013.   In the case of Osun State, it adopted the CPS and enacted its law in 2009. It had also made significant progress in its implementation of the CPS, having so far registered 45,106 employees under the Scheme. It had also remitted N4.15billion as pension contributions, while the sum of N1.90billion had been remitted into the Retirement Benefits Bond Redemption Fund Account. However, the State is yet to renew the Group Life Insurance Policy for its employees in 2013 and had also not carried out an actuarial valuation to determine accrued pension rights of employees.  With regards to Ogun State, it adopted the CPS and enacted its law in 2007. It had also made significant progress in its implementation of the CPS having so far registered 24,902 employees under the Scheme and remitted N10.90billion as pension contributions, while the sum of N3billion had been remitted into the Retirement Benefits Bond Redemption Fund Account held at the Central Bank of Nigeria. However, the State is yet to put in place a Group Life Insurance Policy for its employees. In the case of Ekiti State, it enacted its law on the CPS in January, 2011 and has also 37,676 employees registered under the Scheme. Ekiti has conducted an actuarial valuation to determine pension liabilities under the old scheme and put in place a Group Life Insurance Policy for its employees. However, the State is yet to commence remittance of pension contributions into employees RSAs with PFAs. Oyo State, has enacted its law on the CPS in January, 2010. However, it is yet to commence the full implementation of the CPS. Ondo State has only drafted a Bill on the CPS, a copy of which had been reviewed by the Commission and comments duly forwarded to the State. I therefore wish to use this occasion to passionately appeal to the States in the Zone that have not completed necessary processes for full implementation of the CPS to renew their commitment and fast track action on all outstanding issues in order to avail their employees of its many benefits. The Commission’s Zonal Office is positioned to facilitate the States’ full compliance with the CPS and provide necessary guidance.

 

6. As part of ongoing efforts at enhancing contributors’ satisfaction, the Commission is currently exploring the possibility of allowing contributors to utilize part of their Retirement Savings Account balances to part-finance the acquisition of low-cost houses. It is our expectation that when they eventually come on stream, these facilities would be availed to States that have fully implemented the Scheme. The Commission had also reviewed its Investment Regulations with a view to facilitating the investment of pension funds towards reducing the huge infrastructure gap in the country. It is worthy to mention that already several states in the federation have so far benefited from the pool of funds generated by the CPS through the issuance of development bonds. As at June, 2013, the value of pension funds’ investment in State Government Bonds was N169.73billion. Most of the States have utilized proceeds from these investments towards the provision of vital infrastructure for the well being of their citizens.

 

 6. Once again, on behalf of the entire Management and Staff of the National Pension Commission, I wish to express our appreciation to all of you for sparing time to attend the official opening of the South-West Zonal Office, Lagos.

 

Thank you and God bless you all.