The nation’s pension funds, under the Contributory Pension Scheme (CPS), grew to about N6.5 trillion as at the end of July 2017, even as the number of pension contributors rose significantly to 7. 6 million, Eyes Of Lagos has exclusively gathered.
As at the end of July 2017, the fund increased to about N6.5 trillion from N6.4 trillion it stood at as at April ending.
Moreover, Eyes Of Lagos gathered that between April and June this year, there were 97,713 Retirement Savings Account (RSA) holders registered under the new pension scheme, with 77,023 contributors from the private sector.
9,148 workers from the federal government registered under the CPS, while state governments recorded 11,542 contributors, thus, increasing the total number of pension contributors from inception of the scheme till now to 7.6 million.
In the same vein, report has it that between April and June, 2017, the pension fund gained about N7.5 billion as private sector added N4.1 billion to the pension pool, with states contributing N1.5 billion, while the federal government added N1.8 billion to the pension funds.
The fund is growing despite the fact that federal government has accumulated about N200 billion pension arrears under the Defined Benefit Scheme (DBS) and Contributory Pension Scheme (CPS), even as most states as well as some companies in the private sector are still defaulting in remittance to RSAs of their workers.
The reason for the constant growth in pension assets, Eyes Of Lagos learnt, is not unconnected to the fact that pension contributions are made on a monthly basis to the RSAs of employees, while the Pension Fund Administrators (PFAs) also make a lot of profits from investment of these funds into federal government bonds, stock market and other less risky investment windows that also go into the pension pool.
Moreover, with some states now ready to join the CPS, as well as the readiness of the federal government to settle some of its arrears, and the National Pension Commission (PenCom) going after defaulting employers, experts said these could push the fund even beyond the aforementioned amount.
Speaking at a retreat organized by the Pension Fund Operators of Nigeria (PenOp) for pension journalists in Abeokuta, Ogun State yesterday, executive director, Crusader Sterling Pension, Mr. Conrad Ifode, said the investment income from pension assets was regarded as a key factor that keeps the fund growing at an acceptable rate, just as the pension assets now has about N2.3 trillion as income from investment of the assets, adding that the security of the fund is also a crucial factor.
Stating that the workers’ contributions are paid by their employers regularly, he added that the PFAs comply with their legal obligations, with no case of fraud recorded nor has any PFA gone bankrupt since inception of the scheme. This, he pointed out, shows that the contributors’ funds are safe.
The director, Centre for Pension Right Advocacy, Mr. Ivor Takor, said most of the PFAs were making money from investment of the pension funds and that some of the profits also goes back into the fund, which increases its volume.
Takor, who is also a former board member of the National Pension Commission(PenCom), however, appealed to the federal government and states to pay their respective pension arrears, as this will go a long way to redeem the lost image of the new pension scheme which has been recently criticised for various reasons, among which is the multitude of arrears owed, just like what was happening in the old scheme.
He applauded the steps taken by PenCom in partnering with the Economic and Financial Crimes Commission (EFCC) as well as other relevant agencies to prosecute defaulting employers, stating that this will also ensure more compliance in the private sector and make sure the fund keeps growing from time to time.
