Highlighting PenCom’s Five Strategic Focus Areas For Sustainable Growth

L-R: Mr. Ibrahim Kangiwa (Head, Research and Strategy Management Department); Dr. Babatunde Alayande (Head, South West Zonal Office); Mrs. Carol Alex Uzomah (Assistant General Manager, Corporate Communications Department); Mr. Peter Aghahowa (Head, Corporate Communications Department); Mr. Muhamadu Saleem, (Head of Contribution and Bond Redemption Department); Hajiya Maryam Bello (Assistant General Manager, National Databank Management Department); and Mr. Ibrahim Garba Buwai (Principal Manager, Corporate Communications Department) at the 2021 Journalists Workshop at Radisson Blu Hotel, Lagos on 26 July 2021.

Strategic focus is seen when an organization is very clear about its mission and vision and has a coherent, well-articulated strategy for achieving or actualizing those set-out objectives. Here EDET UDOH highlights the five strategic focus areas of the National Pension Commission (PenCom) unveiled recently.

The National Pension Commission (PenCom) following the termination of the Corporate Strategy in December 2020 and the need to provide strategic guidance for the Commission in the 2021 Financial Year, pending the development of a new Corporate Strategy, the Director-General, on 2 November 2020, crafted a five-prong strategic approach.

The five strategic focus areas are aimed at ensuring measurable impact on the economy as well as positioning the industry for sustainable growth in the post-COVID-19 era as well as maintaining momentum on the Commission initiatives in the following areas: Increased portfolio diversification of Pension Fund Investments;  Sustainable growth of the pension industry through the expansion of coverage of the Contributory Pension Scheme with special emphasis on States and the informal sector; Enhanced pursuit of the resolution of the pension liabilities of the Federal Government under the Contributory Pension Scheme; Public awareness campaign efforts and the vigorous improvement of customer service delivery.

Speaking at the 2021 PenCom Workshop for Journalists in Lagos with the theme: “Positioning the Pension Industry in a Post COVID Era” recenutly, the Director-General, PenCom, Aisha Dahir-Umar, explained that the strategic focus plan was birthed following the termination of the corporate strategy in December 2020 and the need to provide strategic guidance for the Commission in the 2021 financial year, pending the development of a new corporate strategy.

She said the focus areas highlighted in the plan will be vigorously and steadily pursued to ensure the attainment of the Commission’s objectives.

She stated that the emergence of the COVID-19 pandemic necessitated a review of business processes across various organisations including the Commission.

According to her, “The COVID-19 pandemic indeed engendered socio-economic disruptions of the entire global order, with multifarious challenges in conducting hitherto routine activities. It was, therefore, imperative for the Commission to deepen technological innovation as it seeks to navigate through the challenges imposed by the pandemic.

“The theme of this workshop highlights the Commission’s laudable response to the pandemic through technology and engagement with relevant stakeholders.

“The most recent technological innovation introduced by the Commission is the in-house designed and developed online Enrolment Application, which has capabilities to register, verify and enrol prospective retirees of Treasury-Funded Federal Ministries, Departments and Agencies (MDAs).”

Dahir-Umar noted that by the deployment of this new application, a mass gathering of people has been avoided while enhancing convenience for the prospective retirees through a seamless enrolment process.

“Another notable technological innovation by the Commission was the design and deployment of the Retirement Savings Account (RSA) Transfer System (RTS), which was launched in November 2020. The RTS is a computer application developed by the Commission, through which RSA holders transfer their RSAs from one Pension Fund Administrator (PFA) to another. Indeed, the activation of the RSA transfer provision, which deepens individual choices, is a major milestone in the implementation of the Contributory Pension Scheme (CPS),” She said.

While giving insight into the Commission’ five strategic focus areas at the Journalist Workshop in Lagos, Head, Research and Strategic Management Department, Mr Ibrahim Kangiwa said prior to this, the 2015-2020  Corporate Strategy had a number of objectives and initiatives categorized under four broad Strategic Themes, namely:  Inclusive and Expanded Coverage; Sound and Sustainable Pension Industry; Safer and Broader Investment Portfolio, and  Collaborative, Enabling and Empowering the Commission.

The 2021 five Strategic Focus Areas are developed to maintain the momentum on the Initiatives captured in the 2015-2020 Corporate Strategy as stated above.

Now let’s look at the 2021 five strategic focus areas namely:  Increased Portfolio Diversification of Pension Fund Investments; Expansion of coverage of the Contributory Pension Scheme; Resolution of the Pension liabilities of the Federal Government; Public Enlightenment & Education and Improvement of Customer Service Delivery one after the other as provided by Mr. Kangiwa in his presentation.

Increased Portfolio Diversification of Pension Fund Investments

The current profile of Pension Fund Investment portfolio in Nigeria indicates about 70% uptake in Federal Government of Nigeria (FGN) Securities.

The Commission is determined to revise this by emphatically supporting an investment climate that mitigates single obligor risks and hedges pension fund assets against inflation.

The focus is to have a more measurable impact on the Nigerian economy through diversified and increased investments of pension funds in infrastructure, real estate and other alternative assets.

The Pension Fund Investments have remained largely in favour of FGN Securities due to the paucity of infrastructural/alternative asset products in the Nigerian financial markets.

The Commission is intensifying efforts to increase uptake of pension funds investments through engagement with relevant stakeholders in a bid to promote safe investment in infrastructure development.

Collaborations with relevant Government Agencies and the Organized Private Sector for viable Public-Private Partnership arrangements in infrastructure for pension fund investment.

Establishment of the Non-Interest Fund (Fund VI) among the Fund types to be managed by PFAs. It required the PFAs to invest Fund VI assets in ethical and Non-interest compliant instruments in line with Islamic Financial Jurisprudence.

Expansion of coverage of the Contributory Pension Scheme (CPS)

The Commission places huge importance on the sustainable growth of the Pension Industry through the expansion of coverage of the Contributory Pension Scheme.

Registration of Micro Pension Participants and employees of the States & Local Governments have been prioritized.

In addition, the Commission has sustained drive to increase participation of the Organised Private Sector through various initiatives and enforcement mechanisms.

A snapshot of Registrations under the CPS and Status of Implementation by States and Local Governments as at 31 March 2021 revealed as follows: A total of 9,383,204 RSAs were registered as at June 2021; a total of 69,310 Micro Pension Contributors have been registered; twenty-five (25) States had enacted pension laws on the CPS; seven (7) States are at the bill stage; four (4) States operate the Contributory Defined Benefits Scheme (CDBS) and one State operates the Defined Benefits Scheme (DBS).

Resolution of the Pension liabilities of the Federal Government Of Nigeria under CPS

Recently, the Federal Government made significant progress towards offsetting major outstanding liabilities of the Federal Government under the CPS.

Specifically, the Commission was granted Presidential approval for the payment of some critical aspects of the outstanding pension liabilities:

Payment of outstanding accrued pension rights for verified and enrolled retirees of treasury-funded MDAs that retired but were yet to be paid their retirement benefits.

The backlog of death benefits claims due to beneficiaries of deceased employees of treasury funded MDAs.

Payment of 2.5% differential in the rate of employer pension contribution for FGN retirees and employees which resulted from the increase in the minimum pension contribution for employers from 7.5% to 10% in line with Section 4(1) of the PRA 2014.

Settlement of the outstanding accrued pension rights of verified and enrolled FGN retirees and compliance with the reviewed rate of pension contributions are significant developments, that have resolved the challenges in these aspects that have lingered since 2014.

Public Enlightenment & Education

Knowledge deficit on the CPS has been a major challenge faced by the Commission and Operators on the implementation of the CPS.

The Commission had developed various platforms to drive public awareness and education on the Contributory Pension Scheme and reinvigorate the public enlightenment and education drive in order to address the challenges.

Some of the platforms include the Conventional Media – Television and Radio programmes such as – Retirement Mata: Aired on 102.7 Naija FM; PenCom on Radio: Aired on 92.9 Kapital FM and Pension Matter – Aired on NTA Network

Print Media – Publication of Major Information of the CPS in Newspapers; Frequently Asked Questions on the CPS, Micro Pension Plan and Transfer Window (These booklets are published in English & three major languages)

The Commission communicates with various stakeholders on the workings of the CPS through the following new media platforms: YouTube, PenCom website, Instagram and Facebook.

Other Platforms, according to Kangiwa include Seminar & Workshop; Engagement Meetings & Courtesy Visits; Consultative Fora ( Operators, States, Labour and Media); Educational Visits and Youth Literacy Programme in Nigerian Universities

(developed and commenced teaching of Pension Courses in Nigeria Universities)

Improvement of Customer Service Delivery

The Commission is focused on improving customer service delivery to address cases of service failure from both the Commission and the operators.

The initiatives would ensure the enhancement of the operational capacity and capabilities of the Commission’s workforce as well as the capacity building and institutional strengthening of the licensed operators. To achieve these, the Commission has taken steps to ensure efficient services are rendered to stakeholders.

Some of the steps take are rendition of monthly Service Delivery Report (SDR) by Pension Fund Administrators; Deployment of Info-mail, Customer Relationship Management App, social media, letters etc. to monitor level of service delivery and feedback; Collaboration with SERVICOM office to ensure customer satisfaction on service delivery and Adoption and Implementation of timelines of Service Level Agreements (SLA) with the PFAs and the Commission.

According to Mr. Kangiwa, “It is noteworthy that since the implementation of the Service Delivery Reporting (SDR) and other measures, the Pension Industry has recorded 90% complaints resolution rate.”

PenCom exists for the effective regulation and supervision of the Nigerian Pension Industry to ensure that retirement benefits are paid as and when due.

The Principal Objects of the Commission as enshrined in Section 18 of the PRA 2014 are:  Enforce and Administer the Provisions of the PRA 2014; Coordinate and enforce all other laws on Pension and Retirement Benefits and Regulate, Supervise and ensure effective administration of Pension matters and Retirement Benefits in Nigeria.

To achieve the foregoing mission and objectives, the Commission develops strategic roadmaps that clearly articulate its responsibilities and serves as a guide to achieve the overall corporate and industry objectives.

In the last 5 years of operations, the Commission had developed the Corporate Strategy (2015-2020) and recently, the 5 Strategic Focus Areas.