PenCom gives reasons for reviewing voluntary contributions

The National Pension Commission has said it reviewed the circular on voluntary contribution to allow workers to save more funds that will guarantee enhanced pensions. The Acting Director-General, PenCom, Aisha Dahir-Umar, said this while explaining the reasons for the change in the circular on voluntary contributions. She said, “The main thrust of the circular is that 50 per cent of the VCs can be withdrawn once in every two years, while subsequent withdrawals would be on incremental contributions from the last withdrawal. Furthermore, the remaining 50 per cent of VC shall be domiciled for augmenting pensions upon retirement.” She also said the circular was necessitated by the observed incidences of high rates of withdrawals from VCs by contributors, which appeared to negate the main purpose of using such contributions to augment pensions at retirement. “In addition, the commission seeks to ensure strict adherence to anti-money laundering provisions and relevant taxes laws,” Dahir-Umar said. While speaking on other initiatives of the commission, she said in order to enhance the monthly pension of retirees in the Contributory Pension Scheme, the commission initiated the pension enhancement programme. She said it was discovered that the returns being generated by the Pension Fund Administrators on the balances of the Retirement Savings Accounts of majority of retirees could be used to enhance their monthly pensions. According to her, the commission sought for and obtained the approval of the Secretary to the Government of the Federation to implement the pension enhancement, which resulted in increased monthly pensions for most retirees receiving pension under the programmed withdrawal arrangement. She said the PFAs commenced the enhancement of pensions of all retirees under programmed withdrawal with effect from December 2017. Dahir-Umar said, “The implementation of the pension enhancement is one of the significant milestones attained since the commencement of the CPS. It confirms that the CPS has workable internal mechanisms to respond to legitimate demands of retirees as they seek a reasonable retirement income.” The PenCom boss said the commission intended to sustain the periodic review exercise in line with relevant provisions of the law.]]>