Pension thieves must be punished —Okonjo-Iweala •Wants review of pension law

Posted by News Express | 8 July 2014 | 3,933 times

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Coordinating minister of the economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, has demanded has demanded commensurate punishment for pension thieves.

“Those who steal pension funds and make life difficult for our senior citizens who spent their youth serving the country must not be allowed to get away with their crime,” the minister declared while speaking yesterday at the opening of the inaugural World Pension Summit ‘Africa Special’ held at Transcorp Hilton Hotel, Abuja.

Okonjo-Iweala, who spoke on the topic, ‘The Role of Pension Funds in Economic Development’, at the forum recalled how Nigeria’s journey to pension reform started during her first stint as Finance Minister in 2004.

“Our Pensions system had become inefficient and was several trillions of dollars in arrears. The switch to the contributory pensions scheme from the old defined benefits or ‘pay as you go’ scheme was indeed a paradigm shift in our pensions system and was a great achievement. Now, again as finance minister, it is also a joy for me that President Goodluck Ebele Jonathan has consolidated on the reforms through his support for the establishment of the Pensions Transitional Arrangement Department (PTAD) that has now enabled us to rationalise, clean-up and make the remnants the old pay-as-you-go system more efficient and more effective for pensioners,” the minister stated.

She spoke with pride of how the value of the country’s pension assets grew from about $4 billion in 2007 to $25 billion now, which is the equivalent of 9.7% of the country’s old GDP and 5% of its newly rebased GDP. “And we are positioned to more with the drive by PENCOM to expand the contributory base. I expect that two decades from now, Nigeria’s pension assets will be more than $100 billion in value,” she said.

Okonjo-Iweala noted that in struggling economies, pension funds are now considered as very powerful pools of investable funds to stem the trend of recession.

“There is a need to review regulations and laws governing the investment of pension funds,” she said, adding: “In Nigeria for example, the Regulation on Investment of Pension Fund Assets has been reviewed four times by the National Pension Commission (PenCom) to allow new investment vehicles due to the need for a more diversified investment portfolio and the need for targeted investments in the real sector of the economy particularly to support infrastructural development. Up to 20 per cent of pension fund assets are now allowed in infrastructure Bonds and Funds as well as in Supranational Bonds and Private Equity Funds.”

Continuing, the minister said: “In the same vein the Pension Reform Act 2004 was just amended in 2014 to allow the deployment of pension fund assets in financing infrastructure and the housing sector, in the aftermath of the establishment of the Mortgage Refinance Corporation to revitalise the operations of the mortgage institutions in the country, and boost the housing finance sub-sector. The new law also strengthens the punitive aspects because those who steal pension funds and make life difficult for our senior citizens who spent their youth serving the country must not be allowed to get away with their crime. To serve as deterrence, they must be punished.”

Organised by the National Pension Commission in conjunction with  the World Summit Group, the pension summit attracted important personalities from Nigeria and abroad, among them President Goodluck Ebele Jonathan.

•Photo shows Okonjo-Iweala.

Source: News Express

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