…..access fund for mortgage —DG PenCom
The National Pension Commission (PenCom) says that holders of Retirement Savings Account (RSA) can access part of their contributions for mortgage financing in the 2014 Pension Reform Act.
The Director- General of the commission, Mrs Chinelo Amazu, said this at a Stakeholders’ Sensitisation Conference on the 2014 Pension Reform Act (PRA) on Wednesday in Abuja.
It would be recalled that 10 years ago, the PRA 2004 was enacted to govern the Nigeria pension reform and industry.
Arising out of a comprehensive review of its implementation, the PRA 2014 which repealed the 2004 Act, was signed into law by President Goodluck Jonathan on July 1, 2014.
Amazu said that the purpose of the conference was to sensitise the stakeholders to the new provisions and developments ushered in the PRA 2014.
She noted that the new pension act introduced a provision that allows contributors seeking to own their primary homes, to apply for part of their account balances as equity for residential mortgage.
She said that access to the funds was subject to the guidelines stipulated by the commission.
She said the efforts on issuing the guidelines were already at an advanced stages.
She expressed optimism that the full implementation of the act would assist in bridging the housing deficit situation in Nigeria.
The DG also said that the act provided for an upward review of the minimum rate of pension contributions by employers and employees.
She added that stiffer penalties and sanctions had also been included against violations of the act.
According to her, the Contributory Pension Scheme (CPS) by the states and local governments has also received a boost under the PRA 2014.
Amazu said that the act provided a standard under which state governments were required to comply with for the benefits of their respective employees.
She said that the act also provided for voluntary participation in the CPS; this, she noted, had paved way for the inclusion of the informal sector.
“This is intended at extending the benefits of the CPS to a wider horizon of labour in the Nigerian economy.”
She said that the act clearly outlined the responsibilities of other government agencies in the implementation of the CPS and the administration of the defunct Defined Benefits Scheme.(DBS)
According to her, the challenges occasioned in the old DBS were to be addressed by the relevant government agencies in line with the act.
She further said there was the provision of the establishment of a Pension Protection Fund and Minimum Pension Guarantee.
This, according to her, would address the other issues aimed at ensuring the sustainability of the CPS.
The Speaker of the House of Representatives, Aminu Tambuwal noted that the National Assembly had contributed significantly in the enactment of the PRA 2014.
Tambuwal, represented by the Chairman, House Committee on Pension, Samson Oko, said that the challenges encountered in the implementation of 2004 PRA necessitated the repeal of the act.
He said that the amendments of the 2004 act was to further deepen contributors confidence in the CPS.
He said that the 2014 act would ensure uniformity in the pension industry.
Tambuwal also noted that the PRA 2014 would give opportunity for more private sectors participation in the CPS.
He said that the sensitisation conference would give room for a robust discussion with a view to improving the debate on the act and ultimately improve the industry.
Recall that PenCom earlier conducted a similar sensitisation conference in Lagos.
The sensitisation would also be conducted in other geo – political zones in the country.
It was also intended to give opportunities to stakeholders to ventilate their views on the activities inherent in the pension industry.
Participants at the conference were drawn from Pension Fund Administrators (PFAs), Pension Fund Custodians( PFCS) retirees, and representatives of relevant agencies of government playing various roles in the pension industry.