Pension advocacy group backs FG’s N758bn bond initiative

The Centre for Pension Rights Advocacy has commended the Federal Government’s planned N758 billion bond to close the pension funding gap in the country.

It described the move as a step toward long-term sector stability and a means to address long-standing pension issues affecting federal civil servants.

Takor said the success of the initiative hinged on PenCom taking proactive measures to implement all aspects of the Pension Protection Fund.

According to him, this which includes the enforcement of the annual protection levy on pension operators.

He said, “The introduction of the Federal Government Pension Bond is a significant step toward addressing the persistent pension funding issues that have plagued retired federal public servants.

“However, for this initiative to succeed, PenCom must take proactive measures to implement all aspects of the Pension Protection Fund, including the enforcement of the annual protection levy on pension operators.

“Transparency, accountability, and strict adherence to the Pension Reform Act will be key to restoring confidence in Nigeria’s pension system.

“To ensure the successful implementation of the pension bond initiative, PenCom must determine the Annual Protection Levy as required by Section 82(2)(b) of the Pension Reform Act (PRA) 2014.

“PenCom must establish and publicly communicate the annual protection levy rate for both the commission and all licensed pension operators for the period covered by the Federal Government bond.”

Takor advised PenCom to ensure proper utilisation of the Pension Protection Fund, adding that the fund must be directed toward its intended purposes.

He said such purposes include: funding the Minimum Pension Guarantee, compensating eligible pensioners for shortfalls or financial losses from investment activities, and providing additional protections as necessary.

He also advised the government to consider enhancing transparency and public awareness, as they fully inform pensioners and contributors about the implementation process of the pension bond and its impact on their benefits.

He noted that the absence of a properly funded Pension Protection Fund had been a major reason PenCom had not been able to introduce a Minimum Pension Guarantee.

“Section 82(2) of the Pension Reform Act (PRA) 2014 outlines the sources of funding for this crucial fund, which includes an annual subvention of one per cent of the total monthly wage bill payable to employees in the public service of the federation.

“Also, an annual protection levy paid by PenCom and all licensed pension operators, and income from the investment of the Pension Protection Fund.

“With the N107 billion proposed in the FG Pension Bond allocated to cover the one per cent wage bill subvention, it is now imperative for PenCom to act on the second funding source,” he said. (NAN)