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PenCom Advises Government To Increase Its Pension Contribution Rate

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By Sola Alabadan

The National Pension Commission (PenCom) has faulted the proposed exemption of personnel of the Nigeria Police from the Contributory Pension Scheme (CPS), advising the federal government to rather review upwards its current contribution rate of 10%.
The Director General of PenCom, Aisha Dahir-Umar, who gave this advice in Abuja during a public hearing on two pension-related Bills by the House Committee on Pension, said that the CPS has provisions that can address the challenges being faced by personnel of the Nigeria Police and other Federal Government Agencies on the administration of their retirement benefits.
The two Bills are seeking for an Act to exempt the Nigeria Police Force from the CPS, as well as to further Amend the Pension Reform Act 2014 to, among other things, provide for a retiree to withdraw a lump sum of at least 75% from the Retirement Savings Account (RSA) and to criminalise undue delay in the payment of pension and for related matters.
“The solution to the pension challenges of the personnel of the Nigeria Police does not reside in their exemption from Contributory Pension Scheme and reversion to the Defined Benefits Scheme, which is clearly unsustainable,” Dahir-Umar told the Committee.
She said the absence of other social security benefits in Nigeria is partly responsible for the clamour by the retirees for exemption or to access substantial amounts as lump sum from their RSA balance.
The Director General said the exemption of the NPF from the CPS would result in the dismantling of the institutions, systems and processes that Government had put in place in the last few years towards the implementation of the pension reform programme.
“Exemption of the personnel of the NPF would imply additional financial burden on the Federal Government by way of unsustainable pension obligations. For instance, as at September 2021, there were 304,963 Police personnel based on IPPIS data. An actuarial valuation revealed that the retirement benefits (pension and gratuity) liability of these personnel under the defunct Defined Benefits Scheme would amount to about N1.84 trillion,” she said.
On the other hand, she said that the liability under the CPS for the same NPF personnel is made up of N213.4 billion as accrued pension rights and monthly employer pension contributions of about N2.2 billion.
To address the concerns of Police Personnel on pension, the PenCom boss advised that the government can review upwards its current contribution rate of 10%.
In addition, she said the PRA 2014 further provides that notwithstanding the pension contributions made by employer and employee into the employee’s RSA, the employer may agree on the payment of additional benefits to the employee upon retirement.
“Accordingly, the Federal Government may wish to provide additional benefits in the form of gratuity to personnel of the NPF upon their retirement,” she said.
Meanwhile, regarding the 75% lumpsum payment, she said the amendment, if approved, would be contrary to the provision of Section 173 of the 1999 Constitution of the Federal Republic of Nigeria (as amended), which guarantees the right to pensions for all public officers as the payment of “at least 75% of the balance of the RSA” as lumpsum at retirement. She added that this will significantly deplete the pension savings such that the contributions will not be sufficient to provide meaningful pensions during retirement.
“That converts the pensions into a provident fund and leaves such a retiree with no periodic pensions, which is contrary to the requirement of Section 173 of the 1999 Constitution,” she said.
The Director General said the proposal is based on a misunderstanding of the concept of pension payment under the CPS.

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Business

NAIPE Names Universal, Guinea, Norrenberger Group As AGM Sponsors

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Three insurance outfits: Universal Insurance Plc, Guinea Insurance Plc and Norrenberger Group, are set to sponsor the 2023/2024 Annual General Meeting (AGM) of the Nigerian Association of Insurance and Pension Editors (NAIPE).

This year’s NAIPE AGM will hold on Tuesday, July 9, 2024, at the Nigerian Insurers Association (NIA) House in Lagos.

NAIPE is the umbrella body for journalists covering insurance and pension sectors in Nigeria.

NAIPE holds its AGM in July every year and companies that sponsor the AGM have the unique opportunity to market their products and services to NAIPE members in the course of the event, who will in-turn push out the information to the general public through publication of stories and analysis in their mediums and platforms.

Universal Insurance Plc is one of the nation’s largest personal lines insurer with over N8 billion in assets.

Universal Insurance offers a broad spectrum of insurance products for all types of businesses, corporate and individuals with unique services delivery.

Some of its extensive products include Auto Insurance, Good In Transit, Property Insurance, Marine Insurance, Bond Insurance, Money Insurance, All Risk Insurance, Boilers & Pressure Vessels Insurance, Builders’ Liability Insurance, Burglary & House Breaking Insurance, Contractors All Risks Insurance, Employer’s Liability Insurance, Erection All Risks Insurance, Fidelity Guarantee Insurance, Fire & Special Peril, and Oil & Gas Insurance, etc.

According to Universal Insurance, “Our vision is to be a dominant, specialised non life insurer in Nigeria, creating and delivering value to stakeholders while our mission is to offer specialised non life insurance protection to clients inspired by innovation, efficiency and prompt claims settlement.”

The Company is known for prompt claims settlement, integrity, satisfaction through professionalism, unity of purpose, reliability, as well as excellent teamwork.

Guinea Insurance Company Limited was incorporated on December 3, 1958, as a non-life insurance underwriting firm to provide first-rate insurance solutions in the General Business category.

Guinea Insurance has always lived up to its name; consistently one step ahead of the industry in the provision of better and affordable risk management solutions.

“We are a major player in the provision of first* -rate financial risk solutions in the General and Special Risks business underwriting categories. We have established a reputation for exceptional competence in the delivery of customer-centric services and product innovation,” the company stated.

With a strong capital base, highly qualified professionals, and modern technology, Guinea Insurance became widely acknowledged for speed and efficiency and thus, remained the preferred insurer for individual and corporate clientele seeking premium insurance and related financial services to date.

The company offers First Class Products which are tailored to meet the numerous needs of its clients, both as individuals and corporate organisations, providing cover options that are rich and robust enough to accommodate virtually all eventualities.

Some of the products are Home Shield Insurance, Fire and Special Peril Insurance, Motor Insurance, Burglary/Theft Insurance, All Risk Insurance, Workmen’s Compensation Insurance, Personal Accident/Group Personal Accident Insurance, Public Liability Insurance, Bonds Insurance, Contractors All Risk Insurance, Erection All Risk Insurance, Marine Cargo Insurance, Fidelity Guaranty, and Oil & Gas Insurance, etc.

Norrenberger Group is a leading, integrated financial services group that provides bespoke financial solutions that add value to its individual and institutional clients.
The Group’s culture is built on the fundamental values that they all hold. Every Norrenberger team member embraces these values and lives by them, not just at work, but in life.

At Norrenberger, they unlock opportunities in society by providing cutting edge investment options and access to alternative financing which in turn allows people to bring their innovative ideas to life and expand their existing businesses.

The Group’s focus is to continue to create financial asset classes targeting the need of every single household in Nigeria. By 2025, they hope to have delivered at least one financial solution to every household.

The Group covers the following business areas amongst others, Asset Management, Investment Banking, Pensions, Securities Trading and Insurance.

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Business

Sovereign Trust Insurance Hosts CII London Delegation

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L-R: Tajudeen Rufai, Consultant, Sovereign Trust Insurance Plc (STI), Emmanuel Anikibe, Executive Director, (Technical Division), STI, Funmi Babington-Ashaye, Fellow, CII UK & MD/CEO, Risk Analyst Insurance Brokers, Olaotan Soyinka, MD/CEO, STI, Isaac Olubitan, Member, CII UK, with the responsibility of developing markets in the area of manpower development for the Institute in the USA, Africa, Asia, Europe and the Caribbean. Others are, Olajumoke Olatubosun, DGM, Marketing Division, STI, Akinwunmi Akinrinmade, AGM/Head, Energy, STI and Segun Bankole, DGM/Head, Corporate Communications & Investor Relations, STI, during the courtesy visit of CII UK to the Head Office of the Underwriting Firm in Lagos.

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Business

Prudential Zenith Life Organises Training, Health Talk For Insurance Brokers

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A cross section of participants during the training session in Lagos.

Prudential Zenith Life Insurance recently organised a training and health talk for insurance brokers in Lagos.
The training, which featured a robust agenda, blending technical training with insightful health discussions, sought to enhance brokers’ expertise in insurance products, compliance and regulatory frameworks, and promoting overall well-being.
It covered various aspects of Prudential Zenith Life’s insurance product offerings, customer service excellence, and the brokers’ incentive scheme to equip brokers with advanced knowledge and skills to serve clients better and provide optimal solutions tailored to individual needs.
The health talk underscored Prudential Zenith Life’s commitment to holistic well-being, which reflects the company’s understanding that a healthy lifestyle is integral to personal and professional success.
Renowned health expert, Dr Lucia Okogwu spoke on the Human Papilloma Virus (HPV), while Head of Corporate Sales – Ifeoma Oragwu emphasised that Prudential Zenith Life believes in empowering brokers with the necessary tools and knowledge to excel in their roles.
“This training and health talk is part of our ongoing efforts to support their professional growth and personal health. A well-informed and healthy broker is better positioned to provide exceptional service to our clients,” she said.
Brokers expressed enthusiasm and appreciated the valuable insights and practical tips shared and gained during the training.
Prudential Zenith Life Insurance Limited is a subsidiary of Prudential Plc., established in 2017 when Prudential Plc acquired a 51% holding in Zenith Life Insurance.
Prudential plc provides life and health insurance and asset management.

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