How Contributory Pension Scheme will aid infrastructural development- PenOP CEO

By allcitynews.ng/ThisDay newspaper

The Chief Executive of the Pension Fund Operators Association of Nigeria (PenOP), Mr. Oguche Agudah, in apparent bid to reassure Nigerian workers of gains of contributory pension scheme has said the country must come to terms with the fact that pension assets the Contributory Pension Scheme (CPS) provides ample opportunity for the development of critical infrastructure.

He said the current advocacy is therefore, focused on educating Nigerians on the use of the collective wealth to improve national development.

His reassurance became imperative following the suggestion and call by the Nigeria Police Force (NPF) and other stakeholders to exit the CPS as well as agitations for a provision to allow a pensioner receive at least 75 per cent of his retirement benefits immediately upon retirement as opposed to the existing 25 per cent.

However, the PenOP boss insisted that the collective wealth should be used to help the system build better infrastructure adding that there should be a limit to wanton private consumption.

He lamented that the pension industry was being punished unduly for transparency, professionalism and consistency having operated for over 16 years.

He said the CPS remained the safest and most sustainable scheme currently adding that there had been in-built checks and balances by the PFAs, Pension Fund Custodians (PFCs) as well as the National PenCom Commission (PenCOM) which is the industry regulator and further vetted by the National Assembly.

Agudah told THISDAY in an interview also stressed that the police exclusion from the scheme was unsustainable adding that the move if allowed will cost the federal government about N2 trillion.

He said, “It is not sustainable. You need to realize that we have moved from a Defined Benefit Scheme (DBS) to a Defined Contribution Scheme and if you are going back to the DBS, meaning that the federal government would need to have at least N1.8 trillion today and invest that at 10 per cent per annum in order to be able to cater for the over 300,000 police serving and retired as available and that’s not sustainable.

“That is not the best use of the federal government’s money especially when there’s a scheme that already caters to that.”

“And as a nation, if we are truthful in fighting corruption, we should make all schemes to be transparent.”

He said, “With the police PFA currently, you can know how many people have been paid in the scheme, how much they have contributed and how much they’ve got. But it’s not the same thing with other schemes.

“So we think in the spirit of transparency, all pensions within the country should be managed under this framework.”

Moreover, on the calls for payment of 75 per cent of contribution at retirement, Agudah said, “I think the pension industry is being punished unduly for transparency, for professionalism and consistency. This scheme has run for about 16 years consistently.

“And the reason why people are asking for 75 per cent is because they can see their balances they can how much is invested every month. The other deductions that are taken from salaries of workers like the National Housing Fund (NHF) – can I ask you how much is in your NHF? You pay taxes every month, how much taxes have you paid since you started working and where has that money gone?

“But the pension scheme is transparent, you can see where the money is going, you can see how much is contributed and because of that people are saying we want to take something.”

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