The minister of
power, works, and housing, Babatunde Raji Fashola, has called on stakeholders
in the pension sector to work in concert to sustain and further step up gains
made by the National Pension Commission (PenCom) to avoid the sad story of the
previous pension scheme.
Babatunde
Raji Fashola
Fashola, who spoke
at the just concluded Pension Industry Strategy Implementation RoadMap Retreat,
took a tour of the History of Pension Funds in Nigeria.
“It is impossible
in this kind of forum to exhaustively deal with the issue of Pension Funds and
its management in the Nigerian public service. What is appropriate is to
highlight the largely unsuccessful initiatives that have been characterised by
such brand names as the National Provident Fund (NPF) and the National Social
Insurance Trust Fund (NSITF).
“Those brands
represent the era when pension was only the responsibility of the employer.
What simply happened was that from a failure of governance, coupled with lack
of funds as a result of planning deficiency, and sometimes incompetence,
pensioners faced a life of uncertainty after a lifetime of service. As at the
time they had become frail, unable to work or earn income, they are left
disappointed by a system that had taken all they had to give. It is a sad story
written on the faces of many living and dead people whose lives tell the story
of anguish.
“It is a chapter of
Nigeria’s story that is perhaps best forgotten, but regrettably they cannot yet
be consigned to history because there are still debts to be paid. There are
still beneficiaries who are owed; there are still Nigerians who gave a lot,
almost everything, under the defined benefit scheme who are yet to receive
anything from them. The current pension regime whose managers are the
organisers of this event, happily, have a better story to tell,” he said,
adding that it is a story of mutual contribution where the employee and the
employer share the responsibility of planning for tomorrow.
Commending the
competence of the regulator, the PenCom, he added that “it is a story different
from the past as the funds are safe and have exceeded N5 trillion.
It is a story of a
better management. It is the starting point for this discussion because there
is a hard lesson here. If people put their money into what they believe in, it
is likely to serve them better.”
He observed that
the old scheme operated in such a way where there was no contribution by the
employee perhaps reduced their role as stakeholders but does not justify the
mismanagement.
He said, however,
“that the real story is about contribution, paying your share; and it takes me
to the next point which is diversification and the relevance of diversification
to our subject. It is not a vision or an idea. It has gone beyond that. It is a
journey, one that started a while ago when the Pension Reform Act was signed
into Law.
story different
from the past, where the funds are safe and have exceeded N5 Trillion. It is a
story of better management. It is the starting point for this discussion
because there is a hard lesson here.
If people put their
money into what they believe in, it is likely to serve them better”.
He observed that
the old scheme operated in such a way where there was no contribution by the
employee perhaps reduced their role as stakeholders but does not justify the
mismanagement.
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