Non-payment of pension will deprive workers of additional benefits.

…as PenCom approved the enhancement plan.

Employees whose employers do not comply with the provisions of the Pension Reform Act 2014 will not be able to benefit from the Additional Benefits Scheme (ABS) recently approved by the National Pensions Commission (PenCom).

To be eligible to participate in the plan, employers must be current in not only opening Retirement Savings Accounts (RSAs) for employees, but also remitting contributions and providing group life insurance to employees. Pencom expects that this will be maintained. staff.

PenCom announced on its website the release of a framework for the establishment of supplementary benefit schemes under contributory pension schemes (CPS).

The Commission said the framework was published to outline how employers can establish and manage ABS when supplementing employee retirement benefits under the CPS.

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Section 4(4)(a) of the Pension Reform Act 2014 (PRA) allows employers to pay additional benefits to employees on retirement.

Furthermore, Articles 54 and 56 of the PRA 2014 only allow institutions authorized by Pencom to hold and manage pension funds and assets, and Article 59 of the PRA 2014 Minimum penalties for violating the provisions are stipulated.

Commenting on ABS, the Chief Executive Officer of the Nigeria Association of Pension Fund Managers, Oguche Aguda, said ABS provides a systematic approach for employers to provide additional benefits to employees through pension schemes. Ta.

“We are prioritizing compliance with PRA 2014 to protect the interests of our employees and maintain regulatory oversight.”

Oguche said the framework emphasizes documentation, transparency and compliance. “Reporting requirements ensure financial transparency. Dispute resolution mechanisms benefit all parties, and clear guidelines on scheme termination protect the interests of participants. Overall, this framework provides additional benefits. We ensure a structured and regulated approach to the scheme, balancing the interests of employers and employees while complying with regulations.”

Regarding how ABS will impact, he said that it mainly focuses on ABS configuration and management, but indirectly affects contributors.

He said: “Employers must comply with pension contributions and group life insurance to ensure the safety of contributors’ funds.” ABS rules govern access to benefits and protect donor interests and compliance with plan rules.

“Reporting requirements increase fund transparency for donors, and dispute resolution mechanisms prevent delays in accessing benefits due to disputes. ABS fully funded requirements ensure long-term financial stability for donors. Overall, the ABS framework benefits pension funds by strengthening their regulation, protecting contributors’ funds, and ensuring rules-based retirement benefits.”

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According to Ogush, organizations that actively participate in the ABS framework are those with a strong commitment to the financial well-being of their employees, the financial capacity to meet additional benefit obligations, and the ability to respond to employee demands. is.

“For Pension Fund Administrators (PFAs), they play a vital role in helping organizations establish and manage their ABS. PFAs can provide guidance on regulatory compliance, investment strategies and management of ABS. . These can help organizations navigate the complexities of providing additional retirement benefits,” he said.

Remittances remain a challenge for many private companies.

Mr Ogwuche added that ABS aims to address remittance issues and improve the pension system. “Requiring employers to certify compliance with pension contributions, requiring external audits to detect fraud, emphasizing timely remittances and insurance coverage to employees, and providing transparency through regular reporting to Pencom.” to promote.”

Mr Oguche said the new scheme is expected to enhance pension assets in several ways.

“This allows employers to offer additional benefits to their employees, diversifying investment opportunities in PFA and potentially increasing returns. Owners can encourage more employee participation, leading to increased contributions and increased assets,” he said.

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The PenCom framework provides that employers can set up an ABS that allows them to pay additional benefits to their employees upon retirement.

“Employers wishing to establish an ABS for their employees must comply with the provisions of the PRA 2014 regarding up-to-date remittance of employee pension contributions, employee group life insurance coverage, and employee group life insurance coverage. “Execution of a portfolio management agreement with the selected PFA.”