PenCom Nigeria Helps You Dissect Nigeria’s Pension Scheme

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Editor’s note: , a journalist, social entrepreneur and author, served as a moderator at a live discussion panel with the management of the National Pension Commission. In this week’s column, he lists answers to the most pressing questions Nigerians have about the Nigerian pension scheme.

Citizen Stanley Nwabia is a young Nigerian. With the country struggling on the tightrope of a financial crunch, he is looking for a way to liquidate his pension funds. “I want to liquidate my pension account, why must they tell me to wait till I turn 50?” he tweeted.

The eminent panel of pension affairs answered thus: The RSA (Retirement Savings Account) was created for retirement benefits and not employment benefits; liquidating one’s RSA is not advisable.

There are millions of Nigerians like Stanley Nwabia who do not fully understand nor appreciate the Pension Act of 2004 and other processes of the contributory pension scheme. It is for this reason that the director general of the National Pension Commission organized an innovative social media round table to explicate Nigeria’s pension laws and processes better.

The Google Hangouts session with live Twitter feeds was not only a novel idea but also presented the perfect vista for interfacing with the general public. The #AskPenComDG had a panel of experts who are at the forefront of pension affairs in Nigeria.

Present were the pension commission officials Lana Loyinmi – the head of the benefits and insurance department, M. B. Umar – the head of the compliance and enforcement department, Dr. Farouk Aminu – the head of the research and corporate strategy department, G.E. Usoro – the head of the public sector pensions department, and M.S Muhammad – the commission’s secretary and legal adviser. They were joined by Misbahu Umar Yola, the managing director of Legacy Pension, and Wilson Ideva, the managing director, of Premium Pension, two private companies serving offering pension fund administering services.

Mr Aminu and Mrs Usoro had more to say about the relevant sections of the Pension Act that had to do with withdrawing from the retirement savings account. Subject to section 3(2) as from the commencement of this act, no person shall be entitled to make any withdrawal from his retirement savings account, opened under section II of this act, before attaining the age of 50 years. Notwithstanding the provisions of subsection (I) of this section, any employee who (a) is retired on the advice of a suitably qualified physician or a properly constituted medical board certifying that the employee is no longer mentally or physically capable of carrying out the functions of his office; (b) is retired due to his total or permanent disability either of mind or body: or (c) retires before the age of 50 years in accordance with the terms and conditions of his employment shall be entitled to make withdrawals in accordance with section 4 of this act.

According to the Hausa proverb, the one who asks questions never gets lost. With this premise, questions kept coming. One of such questions to the panel was how many staff should an organization have before enrolling them in a pension scheme. The panel stated that as an employer, three employees were mandatory to join the pension scheme.

Another issue that was explained in detail was the process of accessing the RSA for personal mortgage, also in cases of medical needs; there is also a provision to access RSA.

There were also several complaints about the transfer window, with social media users asking on when the next transfer window will be available. This was also stated against the background of how difficult it was to have an open transfer window. To this, the panel stated that they were all working on structures that will facilitate easy transfer.

Most importantly, the panel was ready and willing to assist employees who had issues, and even went ahead to ask employees to report organizations that are disallowing enrolling into the contributory pension scheme.

This is also alongside issues that concern the lack of remittance by organizations. They have been asked by the panel to report anonymously for enforcement.

Questions bothering on the integrity of the contributory pension scheme were also asked, however it was stated in clear terms that the managing and or keeping of pension and assets are licensed and continually regulated and supervised by the National Pension Commission, especially cases like that of the alleged Abdurrashid Maina pension scam.

Most respondents and participants in the social media round table tasked the panel on withdrawals from their RSAs. Several times it was explained that RSA was not like a regular bank account for withdrawals but was specifically set up against one’s retirement – which is a state everyone will eventually get to.

The #AskPencomDG is one classic example of e-governance. This singular discussion went a long way in explaining to the general public the intricacies of the pension scheme and how it affects the personal lives of contributors and the social economy in general. One hopes with these regular interfaces citizens like Stanley Nwabia are not only better educated and informed but also fully understand that one’s future shouldn’t be slaughtered on the altar of “enjoyment” today, at the detriment of the future when one will be frail and unable to work.

Author, Alkasim Abdulkadir

Author, Alkasim Abdulkadir

Alkasim Abdulkadir, a journalist and social entrepreneur, has worked for the BBC, CNN and Al Jazeera. He is the 2012 recipient of The Future Awards Excellence in Service for Journalism. Follow him on Twitter .

The views and opinions expressed here are those of the author and do not necessarily reflect the official policy or position of

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The post PenCom Nigeria Helps You Dissect Nigeria’s Pension Scheme appeared first on Nigeria News today & Breaking news | Read on NAIJ.COM.

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