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Using Pension Fund For COVID-19 Palliatives

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Some media outfits on Saturday 25th April 2020, carried the response of the President of the Nigeria Labour Congress (NLC), Comrade Ayuba Wabba, mni to a question as to wether the Contributory Pension Fund could be used as palliatives as the lockdown entered the fourth week. The said question was asked during the Joint National Briefing of the Presidential Task Force on COVID-19 in Abuja on Friday 24th April 2020. The NLC President as expected, opposed using Contributory Pension Funds for palliatives. He was quoted to have said that “pension fund is not free money; it is the money that belongs to pensioners, which is in pensioners retirement savings accounts. It is structured in such a way that a pensioner continues to draw this money throughout his life. He talked about the need to protect the fund and ensure that pensioners or the workers contributing the monies would have something to rely on”. He was further quoted as haven concluded by saying that the money should not be used for COVID-19 palliatives. For taking this position and saying it out and clear, we at the Centre for Pension Rights Advocacy (CPRA) are proud of him.

The Secretary to the Government of the Federation and Chairman of the Presentational Task Force (PTF) on COVID-19, Boss Mustapha, was quoted to have assured that the federal government will not borrow from Contributory Pension Fund to provide palliatives to cushion the effect of COVID-19 lockdown in the country. He was quoted to have said: “We had looked at the issue of pension funds. As a matter of fact we even got the Minister of State of Education to do us a position paper and our conclusion is that the time is not even right for us to go there because the entire world order in terms of our economy and in terms of our health system has been disrupted by COVID-19 and the consequences nobody can imagine until the dust is settled.”

We at the Centre applaud the conclusion reached by the Presidential Task Force on the matter. This conclusion and the response of the NLC President would have been sufficient to put to rest, any further comment of the matter. However, some issues in the SGF’s response need to be addressed and that is what we intend to do here.

The SGF was quoted to have said: “As a matter of fact we even got the Minister of State of Education to do us a position paper and our conclusion is that the time is not even right for the us to go there …”. The federal government has been eyeing the Contributory Pension Funds for a long time now. First it was for infrastructural development and now for COVID-19 palliatives. The Centre along with other critical stakeholders of the fund including the NLC had made it known that they are not opposed to using pension funds for infrastructural development because pension funds are long term investable funds that are also opened for investment in infrastructure, provided that is done within a legal framework acceptable to all. Therefore we will rest the case with regard to infrastructural investment of pension fund.

What is worrisome at the moment to us at the Centre is the idea that government had even eyed the Contributory Pension Fund for COVID-19 palliatives. Unfortunately, whenever there is a slide confusion in the economy, government without first taking into consideration the principal objectives for which the fund was established; which is ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory, States and Local Governments or the Private Sector receives his retirement benefits as and when due; and assist improvident individuals by ensuring that they save in order to cater for their lively hood during old age.

That the PTF even remotely considered the use of the Contributory Pension Funds for COVID-19 palliatives to the point of getting a Minister to do a position paper for government on the matter, is a matter of great concern to some of us stakeholders of the fund. This discussion will limit itself and will therefore not go into discussing the federal government compliance with the provisions of the Pension Reform Act 2014. The Act established the Fund, and laid down rules and guidelines on how the fund should be manage, invested and pensions paid.

It is impossible for the government, to take pension fund for any purposes outside the law establishing the Fund. In the first place, almost 70% of the funds had been invested in government treasury bonds. The money is not cash. Assuming without conceding that it can be used for COVID-19 palliatives, then the government will have to first provide the cash to buy back the bonds.

In the total funds in the kitty, Federal and States Governments workers account for less than 50% of the value of the over 10 trillion Naira Contributory Pension Fund. The balance is owned by private sector workers. The composition of the Fund is the contributions of public sector workers, private sector workers and the return on investments. The fund is being used for the payment of current pensioners under the Contributory Pension Scheme (CPS) and future pension for current workers (contributors) in both the public and private sectors. The fund is in the respective Retirement Savings Accounts (RSA) of the pensioners and workers. Moreover part of the fund, has been used to purchase annuity with Life Insurance providers, for retirees who opted for Annuity as against Programme Withdrawals housed by Pension Funds Custodians and managed by PensionFunds Administrators.

The question, which the person who asked the question during Friday’s Joint National Briefing of The Presidential Task Force on COVID-19 and the Presidential Task Force that commissioned the Minister to State of Education to do a position paper on the matter have to answer is: how can money that already belongs to the pensioners and workers become a palliative?

We conclude by siding with the NLC President’s position that the Contributory Pension Fund can not be used for COVID-19 palliatives now or in the future. Rather the fund should be protected for the achievement of objectives for which it was established. We also want to remind all that the Federal Government lacks jurisdiction over the management of the Fund; the mandate of the government is to provide the enabling law and the regulation of the Fund.

Ivor Takor, Director, Centre for Pension Right Advocacy

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NAICOM, OHCSF Move To Ensure Workers Benefit From Group Life Assurance

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By Sola Alabadan

In order to equip civil servants with knowledge and tools to effectively manage and benefit from the Group Life Assurance Policy, the National Insurance Commission (NAICOM) and the Office of the Head of the Civil Service of the Federation (OHCSF) recently organised a capacity-building workshop on the compulsory insurance policy in Abuja.

Section 9(3) of the Pension Reform Act 2014 mandates employers to maintain a Group Life Assurance policy for their employees, with a benefit of at least three times the employee’s annual total emolument.

The workshop brought together stakeholders from government ministries, departments, and agencies to enhance understanding and implementation of the policy.

In her opening remarks, Mrs. Didi Esther Walson-Jack, Head of the Civil Service of the Federation, represented by Mrs. Oyekunle Patience, emphasised the importance of insurance in safeguarding public servants’ welfare and ensuring financial security for their families. She commended President Bola Tinubu for renewing the annuity policy and applauded NAICOM for initiating the training.

The Commissioner for Insurance, Mr. Olusegun Omosehin, represented by Mr. Ekerete Ola Gam-Ikon, Deputy Commissioner for Finance and Administration, expressed appreciation for the collaboration and assured participants of NAICOM’s commitment to transparency and accountability in policy implementation.

The workshop aimed to equip civil servants with knowledge and tools to effectively manage and benefit from the Group Life Assurance Policy, a critical component of the Federal Government’s welfare package.
The event marked a significant step in strengthening life insurance policy implementation across the federal civil service, reinforcing the government’s dedication to employee well-being.

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PenCom Mandates Newspaper Owners To Pay N720m Pension Debt

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The Director General of the National Pension Commission (PenCom), Ms. Omolola Oloworaran, has raised alarm over widespread non-compliance with the Pension Reform Act (PRA) 2014 by media organisations in Nigeria, revealing that newspaper owners owe journalists over N720 million unpaid pension contributions.
Speaking during a courtesy visit to the President of the Newspaper Proprietors’ Association of Nigeria (NPAN), Mr. Kabiru Yusuf, in Abuja recently , Ms. Oloworaran described the findings as “very troubling” and called for urgent collaboration between PenCom and newspaper proprietors to enforce compliance across the sector.
PenCom acknowledged the deep value of the role of the media in shaping public discourse, and said it is disheartening that many organisations within the media are failing to meet a fundamental obligation to their employees.
The Director General said PRA 2014 mandates all employers to remit pension contributions for their employees monthly, within seven days of salary payment.
However, she said PenCom’s investigations show that many newspaper houses have ignored this obligation, with arrears totalling over N720 milliiaon.
Ms. Oloworaran informed NPAN that PenCom is not seeking to penalise erring organisations at this stage, but prefers a collaborative approach to achieving sector-wide compliance.
She added that PenCom has been engaging employers across industries and recently held discussions with the Nigerian Press Council (NPC) to drive awareness and compliance in newspaper organisations,.
While noting the overall poor compliance within the industry, the DG singled out Daily Trust for commendation, describing the paper as a “leading example” for consistently meeting its pension obligations since 2015.
Responding, NPAN President, Kabiru Yusuf, acknowledged the pension compliance issues in newspaper organisations in Nigeria, but urged PenCom to understand the dire financial situation of the media industry.
NPAN President said the reality is that many newspapers in Nigeria are struggling to even pay staff salaries, let alone pension contributions, adding that only a few are managing to stay afloat, and even among them, there is often reluctance to part with money for statutory payments like tax and pensions.
He welcomed PenCom’s engagement efforts and proposed a broader industry dialogue through the Nigerian Press Organisation (NPO), a coalition that includes NPAN, the Nigerian Guild of Editors (NGE), and the Nigeria Union of Journalists (NUJ). Yusuf suggested that PenCom participate in an expanded meeting of stakeholders in Lagos this year, where the challenges of compliance and potential solutions can be jointly addressed.
Ms. Oloworaran agreed to the proposal, expressing hope that such a forum would serve as a meaningful step toward sustainable pension reform compliance in the media.
“We are not focused on being punitive because the law allows us to sanction. That is not what we are looking at. I believe we can work together to get all these media houses to make the necessary contributions towards the financial security of their workers,” the DG said.
The meeting marked a renewed effort by PenCom to hold employers in the media sector accountable and compliant with the PRA 2014.

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PenCom, Head of Service Plan N30bn Gratuity For Workers Annually

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The National Pension Commission (PenCom) and the Office of the Head of the Civil Service of the Federation (OHCSF) are collaborating to introduce a Gratuity Framework for civil servants in treasury-funded Ministries, Departments and Agencies (MDAs) under the Contributory Pension Scheme (CPS).
This development followed a high-level meeting held recently in Abuja, when the Director General of PenCom, Ms. Omolola Oloworaran, paid a courtesy visit to the Head of the Civil Service of the Federation (HCSF), Mrs. Didi Esther Walson-Jack.
Speaking about boosting retirement benefits, Ms. Oloworaran informed the Head of Service that PenCom is working on modalities for the establishment of a Gratuity Scheme, in line with Section 4(4)(a) of the Pension Reform Act 2014 for retiring employees of Federal Government treasury-funded MDAs.
The PenCom boss said this has been estimated to cost the federal government only about N30 billion per annum as determined by PenCom and confirmed by the 2024 Stakeholders Committee on outstanding pension liabilities, if retiring federal employees are paid 100% of their last gross annual remuneration.
She said the amount represented a modest but impactful intervention to improve the welfare of those who have served the nation with dedication.
Furthermore, the DG of PenCom highlighted the persistent issue of delayed pension payments due to delay in payment of Accrued Rights. She noted that previous collaboration between PenCom and the Office of the Head of Service yielded significant progress, including securing a Federal Executive Council (FEC) approval for a N758 billion bond to clear outstanding pension liabilities under the CPS.
Ms. Oloworaran unveiled a one-time, comprehensive online enrolment exercise to establish the accrued pension rights liability of all serving federal employees of treasury-funded MDAs who were in service prior to June 2004. She said this online verification and enrolment exercise, which will commence from August 2025, will enable PenCom present to the Federal Government the amount so determined with a view to possibly raise a Bond to settle the entire liability once and for all.
The DG added that the determined accrued pension rights for every eligible civil servant will be credited into their individual Retirement Savings Accounts (RSAs).
On the benefits of the enrolment, the PenCom DG said retirees will start earning returns on these funds, and the system becomes shielded from political transitions, as Pension Fund Administrators (PFAs) will take full control.
In addition, Ms. Oloworaran told the Head of Service that PenCom is developing a digital application to streamline the enrolment process. PenCom plans to deploy the online application by August 2025. She sought OHCSF’s support to issue a circular directing all MDAs to participate in the enrolment and submit the necessary documentation.
Speaking on the challenge of uncredited pension contributions among MDAs not enrolled in the Integrated Payroll and Personnel Information System (IPPIS). Ms. Oloworaran said that contributions are often made without accompanying schedules
To address this, the DG said PenCom has introduced a new Pension Contribution Remittance System that requires all employers to henceforth, utilise selected Payment Solution Support Providers (PSSPs) for the remittance of their employees’ contributions. This ensures accurate and prompt remittance of pension contributions into respective RSAs of employees
The DG requested the Head of Service’s assistance in issuing directives to IPPIS Office in the Office of the Accountant General of the Federation (OAGF) and MDAs not on IPPIS, such as tertiary institutions, self-funding agencies, and others to henceforth, utilise selected PSSPs for remittance of monthly contributions, effective June 2025,
In response, the HCSF, Mrs. Walson-Jack, expressed her full support for all the initiatives and commended PenCom for its proactive approach to improving pension administration. She pledged to issue the necessary circulars to MDAs and to collaborate closely with PenCom in developing the modalities and securing the approvals for the Gratuity Scheme.
Mrs. Walson-Jack said civil servants have been calling for gratuity and expressed her full backing for the proposed Gratuity Scheme.
To cement the partnership, PenCom and OHCSF agreed to establish a Standing Committee to work on the outlined reforms and address any emerging issues in the future.

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