BUSINESS
PenCom Kicks against Recommended Payment of 75% Lump Sum
By Joseph Amah, Abuja
The National Pension Commission (PenCom), has frowned at the suggested payment of “at least 75 per cent’’ lump sum to retiring workers under the Contributory Pension Scheme (CPS). The suggestion was made in the Pension Reform Amendment Bill currently before the National Assembly.
PenCom’s Director-General, Mrs Aisha Dahir-Umar, says the implication of the suggestion is that a retiring worker can decide to take 100 per cent of the money in his or her Retirement Savings Account (RSA).
Dahir-Umar noted that the suggestion was based on a misunderstanding of the concept of pension payment under the CPS.She said the proposed amendment also contravened the 1999 Constitution, which guaranteed the right to pensions for all public officers.
“That suggestion also converts the CPS into a Provident Fund and leaves such a retiree with no periodic pensions, contrary to the requirement of Section 173 of the 1999 Constitution,’’ she said.Dahir-Umar expressed her views in a presentation at a public hearing organised by the House of Representatives Committee on Pensions. The hearing focused on a Bill for an Act to amend Section 1(c) and Section 7(2) of the Pension Reform Act 2014.A copy of her presentation was obtained by the News Agency of Nigeria (NAN) on Monday in Lagos.
Section 7 (1) (a) of the Pension Reform Act (PRA) 2014 allows for only 25 per cent of the retirement saving to be paid as lump sum to a retiree. This is provided that the amount left after the lump sum withdrawal is sufficient to fund a programmed withdrawal or annuity over 10 years or expected lifespan of the retiree.
According to Dahir-Umar, the provision of monthly pensions is central to the objective of mitigating old age poverty under the CPS. She explained that PenCom retirement benefits payment template ensured that the RSA had enough balance and should be sufficient to provide at least 50 per cent of the retiree’s terminal pay as monthly pensions.She noted that it was the residue after this provision was made that could be taken as lump sum.“It is inaccurate to suggest that there is a fixed lump sum for all retirees; rather the lump sum is determined after securing a minimum replacement ratio of 50 per cent of last pay as monthly pensions,’’ she said.
The PenCom boss observed that the proposed amendment would amount to leaving only 25 per cent to be spread for pensions thus resulting in meagre monthly pensions. “It is doubtful if the 25 per cent balance in a retiree’s RSA, after deduction of 75 per cent lump sum would be adequate to reasonably cater for his livelihood in old age.
“It is important to note that the payment of 75 per cent of RSA balance as lump sum upon retirement is not obtainable in other jurisdictions operating the CPS. “This is due to its resultant effect of rolling back the principal objectives of the CPS. “The objective seeks to provide a pool of pension funds that are invested for the benefit of retirees throughout their retirement life and not just immediately upon retirement,’’ Dahiru-Umar stressed.
She added that PenCom supports the improvement of living conditions of retirees as evidenced by the periodic pension enhancement for retirees under the programmed withdrawal mode.
She suggested that the remedy for the agitation for the payment of “at least 75 per cent lump sum’’ lies in the implementation of the provision of Section 4(4) (a) of the PRA, 2014 dealing with payment of additional benefits upon retirement.
“It provides that `notwithstanding any of the provisions of this Act, an employer may agree on payment of additional benefits to the employee upon retirement’,’’
“Through this provision, employers may establish Gratuity or End of Service Benefit Schemes that are to be managed by licensed Pension Funds Administrators the exclusive benefit of employees at retirement. “These funds are usually separate from the RSA balances of employees and are paid directly to them at retirement. “Ultimately, this would considerably enhance the amount available to employees as retirement benefits,’’ Dahiru-Umar added. (NAN)
The Securities and Exchange Commission (SEC) says it is organising a compliance summit for Chief Executive Officers (CEOs) and Compliance Officers to address Financial Action Task Force (FATF) and related issues.
The Director-General of SEC, Dr Emomotimi Agama, said this in a statement made available on Saturday in Lagos.
He said that the summit, with the theme, “Navigating regulatory challenges: Aligning with changes in FATF in the era of VASPS,” would be in Lagos on Oct.
21 and Oct. 22.According to him, SEC aims to equip capital market operators with the necessary tools and knowledge to thrive in a complex regulatory environment.
Agama said that the Nigerian Capital Market Institute (NCMI), a subsidiary of SEC, would hold the summit.
He noted that the summit would ultimately foster a culture of compliance and integrity in the operations of the participants.
“The aim is to equip capital market operators with essential insights and strategies to effectively navigate the evolving regulatory landscape.
“Attendees are to gain knowledge of understanding regulatory changes, clarity on the latest updates to FATF standards and how these impact Virtual Asset Service Providers (VASPs).
“They will also learn best practices for aligning their compliance programmes with new regulations, ensuring they meet international standards that enhance compliance frameworks in their organisations,” he said.
According to him, key objectives of the summit are regulatory compliance, understanding and implementing Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations.
Others, he added, would include risk management, which encompasses identify, assess and mitigate risks associated with virtual assets and operational efficiency which would lead to enhanced internal controls, governance and compliance frameworks.
The director-general mentioned that the benefits of the summit include regulatory clarity, risk reduction, enhanced governance, competitive advantage and networking opportunities.
The welcome address at the summit is expected to be presented by Ms Frana Chukwuogor, Executive Commissioner, Legal and Enforcement, SEC Nigeria.
The opening remarks and overview of the summit will be delivered by Dr Agama while Ms Hafsat Bakari, Director, Nigeria Fraud Intelligence Unit(NFIU) will present a goodwill message.
Among the speakers expected at the event are, Mr Obinna Iwuno, Chairman, Stakeholders in BlockChain Association of Nigeria (SiBAN) and Certified Cryptocurrency Compliance Specialist and Investigator, Mr Ade Bajomo.
Also, Mr Zacch Adedeji, Executive Chairman, Federal Inland Revenue Service (FIRS), President, Fintech Association in Nigeria, Mr Peter Shodipo, and the President, Committee of Chief Compliance Officers of Capital Market Operators in Nigeria (CCCOCIN) among others.(NAN)
To end the week, the stock market rebounded from previous losses, gaining N74 billion.
Investor interest in MTN Nigeria, FBN Holdings, Guaranty Trust Holding Company (GTCO) and other equities lifted the market.
Notably, the market capitalisation opened at N56.014 trillion, adding N74 billion or 0.
13 per cent to close at N56.088 trillion.The All-Share Index also advanced by 0.
13 per cent, or 129.44 points, closing at 97,606.63, compared to 97,477.19 recorded on Thursday.As a result, the Year-To-Date (YTD) return increased by 30.54 per cent.
The market breadth closed positive, with 31 gainers and 19 losers on the floor of the Exchange.
On the gainers’ chart, Consolidated Hallmark Plc and Sterling Nigeria led by 9.
45 per cent each to close at N1.39 and N4.98 per share respectively.Mecure followed by 9.19 per cent to close at N10.10, Regency Alliance Insurance gained 9.09 per cent to close at 72k, while Fidson Healthcare Plc increased by 8.24 per cent to close at N15.10 per share.
Conversely, Deap Capital Management and Trust led the losers’ chart by 9.93 per cent to close at N1.36, NEM Insurance trailed by 9.71 per cent to close at N7.90 per share.
Daar Communications also lost 9.52 per cent to close at 57k, Tantalizers shed 9.09 per cent to close at 60k, while Dangote Sugar declined by 3.31 per cent to close at N31 per share.
Analysis of the market activities showed trade turnover settled higher relative to the previous session, with the value of transactions up by 20.33 per cent.
A total of 304.43 million shares valued at N5.60 billion were exchanged in 6,950 deals, compared with 277.75 million shares valued at N4.65 billon in 7,091 deals traded in the previous session.
Meanwhile, Access Corporation led the activity chart in volume and value with 68.26 million shares valued at N1.34 billon.(NAN)
The Ministry of Petroleum Resources has inaugurated a Technical Working Group to enhance gas reticulation practices in Nigeria’s building industry.
The ministry’s Permanent Secretary, Amb. Nicholas Ella inaugurated the Technical Working Group (TWG) between the National Gas Expansion Programme (NGEP) and the Council of Registered Builders of Nigeria (CORBON) on Wednesday.
Reports= says that reticulation refers to the process of creating a network of pipes or tubes to distribute gas or other utilities to buildings or industrial sites.
The permanent secretary restated the importance of creating energy smart cities, saying that modern urban development relies on efficient gas and utility distribution systems,
“Most modern cities in developed countries have evolved to energy smart cities where energy, specifically gas and other utilities are piped to districts and estates.
“However, one of the key tools in creating energy smart city is the National Building
Code which, in essence, sets the guidelines on Building Pre-design, designs, construction and post-construction stages,” he said.
The permanent secretary reiterated the benefits of reticulated gas systems for households and businesses alike, adding that it ensured metered supply akin to water and electricity,
According to him, it eliminates the need for cumbersome refills, and also enhances safety by burying pipes and incorporating advanced safety equipments.
“The TWG is tasked with designing a comprehensive policy to implement best practices for gas reticulation using LPG, PNG, and Bio-Gas across Nigeria’s building sector.
“Key responsibilities include reviewing the current National Building Code, examining global gas distribution systems, and proposing quality standards for materials used in gas installations,” he said.
The permanent secretary emphasised the need for rigorous safety protocols and guidelines to ensure the efficient and safe use of gas in construction.
He urged the group to prioritise environmental sustainability in its recommendations, adding that the group is expected to submit its report by Nov. 15.
Earlier, Mr Samson Opaliwah, the Chairman of CORBON. expressed the council’s commitment to collaborate with the group to ensure safe uptake of gas for use in houses and housing estates in Nigeria.
“I assure you of the williness of CORBON to leverage the expertise and resources at her disposal to ensure that steps are put in place for gas infrastructure in buildings and estates.
“The gas infrastructure will be safe, sustainable and world-class.
” Our collective efforts will yield clear, standardised guidelines for safe and effective gas systems in buildings, matched with a skilled workforce to meet growing demands in Nigeria,” he said. (NAN)
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