The Senate Tuesday deplored the perceived poor management and dormancy of a whopping N2.9 trillion pension funds and asked pension managers to channel the funds into infrastructural projects and job creation.

The suggestion followed the second reading of a bill seeking to repeal the 2004 Pension Reform Act with a view to “making provisions for contributory pension scheme and for connected purposes.”

Leading a debate on the bill, Senate Leader, Victor Ndoma-Egba, said highlights of the 2004 Act included ensuring that pension funds were invested in safe and fruitful ventures “that would increase faster than the rate of inflation and exchange rate deterioration to ensure enhanced package on retirement,” among others.

According to him, almost a decade after the Act was enacted, the plight of pensioners had not been alleviated adding that many people were still left out of the scheme.
He also said the amended bill was informed by the non-remittance of pension contributions to administrators by ministries, departments and agencies (MDAs); delayed payment and non-payment of gratuities and pensions to retirees; under payment of retirement benefits; withdrawal of some security agencies from the scheme as well as corruption, misappropriation and outright embezzlement of pension funds.

The amendment bill also seeks to ensure that the minimum contribution to the retirement savings by both the employer and employee would be 12 and half and eight per cent respectively, as against the provision in the current Act where the employer pays 12 and half per cent, while the employee contributes seven and half per cent.

Speaking on the issue, Senator Babafemi Ojudu, lamented that a whopping N2.9 trillion pension fund was idling away in the custody of pension fund managers as he recalled that in China, there was a specialised bank for the management of pension funds.

He added that such funds were channelled by Chinese government towards aggressive infrastructural development as well as other life enriching ventures capable of improving the living standard of the people, regretting, however, that the reverse is the case in Nigeria.

Some other senators like James Manager, Ifeanyi Okowa and Barnabas Gemade, expressed the need to ensure that the bill provides for the usage of pension funds for economic and infrastructural developments and as well spell out sanctions for organisations which flout the provisions of the bill.

They also expressed the necessity to ensure wider coverage of the scheme through organisations which have as few as five workers.

In his remarks, Senate President, Senator David Mark, said the major problem revolving around the management of pension funds was the commitment of such important task into the hand of persons whom he said lacked knowledge of fund management.

“I think the problem we’ve had is that we have all sorts of rookies. People who have no idea about managing funds, not to talk of very huge pension fund, go to manage our pension fund. And I think it’s a very specialised area where you cannot just wake up tomorrow morning and be appointed to manage the pension fund. You will mismanage it. That’s what I suspect has happened.



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