Senate passes Pension Reform Bill

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Senate President, David Mark
Senate President, David Mark

The Senate on Tuesday passed the Pension Reform Bill which prescribes a minimum of 10 years imprisonment for any person who steals pension funds.
The Pension Reform Act prescribes that any Pension Fund Administrator (PFA) or Pension Fund Custodian (PFC) who misappropriates pension fund is also liable to refunding three times the value of the amount diverted.
The Pension Reform Bill was passed at the floor of the Senate following the conclusion of the clause by clause consideration of the report of the Committee on Establishment and Public Service.
The passage of the bill automatically repealed the Pension Reform Act 2004 thereby making it possible for every person who worked in either the public and private sector, to receive pension benefits as and when due.
It also stipulated that whoever attempts to misappropriate the fund, on conviction, will be liable to the same punishment as is prescribed for the full offence in the act.
According to the Bill, all monies received as penalty by the Pension Commission shall be paid into the Pension Protection Fund expected to be established under section 82 of the Act.
Apart from payment of fines and serving the required jail terms, the Bill also mandates anyone found to have misappropriated pension fund to forfeit any property, asset or fund to the Federal Government.
The Bill imposed a fine of N10 million on any PFA which failed to meet the obligations of the contributors while each of the directors of the firm would pay N5 million each as penalty.
Furthermore, the Bill stipulated that a PFA which failed to comply with any provision of the Act “shall be liable to a penalty not less than N500,000 for each day that the non-compliance continues.”
In addition, the Bill prescribed that the PFA will forfeit the profit from that investment to the beneficiaries of the Retirement Savings Accounts while he is also to make up in the case of any loss.
Briefing journalists after the passage of the Bill, the Chairman, Senate Committee on Establishment and Public Service, Senator Aloysius Etok said the senate fixed 10 years of cognate experience for Director-General of PENCOM.
“On the first day of presentation of the report of the committee, our recommendation of a fit and proper person was rejected and 15 years of post-qualification was adopted. So, the post-qualification experience for the one who would be DG of PENCOM is 15 years.
“In Nigeria professional pension administration is below 10 years. It’s important to note that we are talking about cognate experience, not-post qualification experience. If you are talking about post qualification experience what about somebody who has 30 years post qualification experience with only two years cognate experience in pension management? So, we decided if somebody who has had 5 years somewhere else and then have additional 10 years cognate experience in professional pension management would be fit to serve as DG.”
Etok said Head of Service and Heads of different departments have directed all the accounting departments to ensure that pension deductions were treated and immediately transmitted to the receiving authority.
According to him, once the Bill is assented to by the President, all the penalties and all the prescriptions contained in the Act would be strictly adhered to by all government agencies.
“We have penalties ranging from 10 years imprisonment. For even failing to give proper information, you have to pay N500, 000 daily by any agency. If you embezzle pension’s funds now you will pay not less than three times the amount of funds you embezzled. That is how serious this Bill has treated pension funds. If you embezzle N10, 000 you are bound to pay a minimum of N30,000 and in some circumstances the presiding judge has the right to make you refund and even go to prison.”

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Etok expressed the hope that the President would give assent to the Bill within the shortest time possible to bring about a total reform into the management of pension funds.

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