THE Senate Tuesday endorsed a bill to re-enact the Pensions Reform Act even as it decried the appointment of poorly-trained and unprofessional individuals to handle the over N2.93 trillion accumulated pensions fund.
Debating the bill entitled, “Bill for an Act to Repeal the Pensions Reform Act 2004 and Enact the Pensions Reform Act 2013,” and sponsored by Victor Ndoma-Egba, the Senate frowned that huge amount of money, which would have been channelled into financing infrastructural projects and creating employment opportunities, were left in the hands of rookies.
The new law, however, allows for upward review of the contribution rates by employees, raising it from 7.5 per cent of monthly salary in the extant law to eight per cent. The employer also has the discretion to pay additional benefits to the employee upon retirement.
Other innovations include that it applies to federal, states, local councils and private sector organisations with as little as three employees or less, except judicial officers already exempted in the extant law under Section 291. Now, the Armed Forces, the intelligence and secrete service of the federation are equally exempted.
“The chairman and members of the Board of Pensions Commission have been prohibited from owning or controlling any financial equity or other interest in any Pensions Fund Administration or Pensions Fund Custodian during their tenure of office and shall not be directors or shareholders in any pensions fund administration within three years after ceasing to be members of the board.
The new law also proposed stiffer penalty for offenders, as such individuals will not only be sentenced or fined but shall also be made to refund monies misappropriated and forfeit asset(s) obtained from the proceeds of any unlawful activity under the bill.
“Contributions of the Federal Government and the Federal Capital Territory (FCT) to the retirement benefits of employees shall be charged on the Consolidated Revenue Fund of the Federation and the Revenue Funds of the Federal Capital Territory respectively.
The bill has been referred to the Senate Committee on Establishment to look at how states and local councils could be brought under the new law, and is expected to submit report in four weeks.
Urging his colleagues to support the bill, Senate President David Mark assured that the reform would ensure that only properly-trained individuals manage the fund, just as it will also save pensioners the rigours of accessing their benefits at retirement.
“There is hardly any pensioner in this country who is not going through hell when he is accessing his contribution,” Mark said. “It is bad and we must do everything possible to make sure that those who have worked and contributed get their pension without stress.”
In the lead debate, Ndoma-Egba informed that the new law, which successfully scaled second reading, would allow for a wider participation in the pensions scheme, timely remittance of pensions contribution, improved retirement benefits, payment of retirement benefits as and when due, as well as strengthen the pensions commission to regulate the sector.
Meanwhile, Mark lamented that the pensions scheme, which involves huge amount of money, is being managed by individuals who lack basic training and dynamism of funds management. He noted that it is a “very specialised area you cannot just wake up tomorrow morning and are appointed to manage.”
“The national budget is N4.9 trillion and we have money in the pensions fund up to N2.9 trillion. So, you can imagine the amount of money at the disposal of few individuals who are not properly supervised, who have no training in management and who just dip their hands into it as and when they feel like
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