Stakeholders Chart Path to Transparency in the Pension Industry in Nigeria – Part 2 – PensionNigeria

Stakeholders Chart Path to Transparency in the Pension Industry in Nigeria – Part 2

As reported in Part 1, stakeholders in the Nigerian pension industry came together to chart a path for greater transparency in the pension industry in Nigeria. This was at a two-day sensitization programme with the theme “Eradication of Pension Fraud in Nigeria” organized by the Economic and Financial Crimes Commission (EFCC), in collaboration with the National Pension Commission (PenCom), which held in Abuja.

Some of the top functionaries at the event include Mr. Boss Mustapha, Secretary to the Government of the Federation; Mr. Abdulrasheed Bawa, EFCC Chairman; Mrs. Aisha Dahir- Umar, Director General of PenCom; Comrade Ayuba Wabba, NLC President; amongst others.

There were presentations delivered at the Workshop by the EFCC, PenCom, Pension Transitional Arrangements Department (PTAD) and the Nigeria Union of Pensioners (NUP). These were followed by discussion panels that highlighted salient issues from the presentations. As earlier noted, the “legacy fraud issues” perpetuated in the Defined Benefits Scheme were not being witnessed in the Contributory Pension Scheme (CPS) due largely to the safeguards established under the Pension Reform Act (PRA) 2014.

While further buttressing this fact, the President of NUP stated in his presentation that “There is no proven case of embezzlement of pension funds in the CPS since it was introduced in 2004”. Although some challenges do exist under the CPS, it was noteworthy that PenCom was working on several measures aimed at mitigating their impact especially on retirees.

Highlighting the anti-fraud safeguards and mechanisms introduced by PenCom during his presentation titled “Implementation, Successes and Challenges in the Pension Industry”, Dr. Farouk Aminu, Commissioner Administration, stated that ring fencing of pension assets through the separation of management and custody of funds; daily monitoring of pension fund investment activities and strict regulation on investment of pension funds; annual and special examination of pension operators; appointment of compliance officers to ensure full compliance with regulatory requirements; stringent regime of sanctions and penalties for infractions under the PRA 2014, amongst others. Furthermore, it was also highlighted that there are adequate provisions in the PRA 2014 on Offences, Penalties and Enforcements relating to pension fraud.

For instance, on misappropriation of pension funds, the PRA provides a fine of three times the amount misappropriated or diverted or a term of not less than 10 years imprisonment or both as well as the forfeiture of property, asset, fund or proceeds of any unlawful activity. In addition, PenCom is also empowered to impose sanctions on the Board, Director, Management or officer of any Pension Fund Administrator or Pension Fund Custodian that violates the provisions of the PRA.

The Director of Operations, EFCC, Abdelkarim Chukka in a presentation titled “Analysis of fraud in Pension Administration in Nigeria (the EFCC Experience) highlighted proper Internal controls, proper reporting procedure, firm and dispassionate Judiciary as well as regular conduct of pension fraud assessment as some of the controls that should be carried out whilst fighting pension fraud.

While discussing the EFCC Presentation, the NLC President, Mr. Ayuba Wabba also noted that there is need to put in place a system to guarantee the safety of pensioners’ information from unauthorized access and avert possible third-party connivance. He posited that it was necessary to adequately counsel pensioners in this regard.

Overall, the CPS has witnessed a consistent growth of pension assets over the years due to the various fraud prevention and detection mechanisms which have been put in place by PenCom. Furthermore, there are recent technological innovations by PenCom that would further facilitate the mitigation of fraud in the pension industry. One of such innovations is the deployment of the Enhanced Contributor Registration System (ECRS), which is a computer Application that strengthens the integrity of the pension contributor’s database.

DONT MISS = Stakeholders Chart Path to Transparency in the Pension Industry in Nigeria – Part 1

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