by ZAKA KHALIQ, Lagos
The managing director/CEO, Linkage Assurance PLC, Dr. Pius Apere, has charged the National Pension Commission (PenCom) on the implementation of the Guaranteed Minimum Pension(GMP) as specified in thePension Reform Act (PRA) 2014.
Dr. Apere, in his paper entitled ‘Failure to implement the Guaranteed Minimum Pension in the Pension Reform Act 2014: Impact on the Welfare of Nigerian pensioners,’ noted that one of the ways to achieve the pensioners’ social welfare goal is the implementation of the GMP as provided in section 84(1) of the PRA 2014, as amended.
This states that “all Retirement Savings Account (RSA) holders who have contributed to licensed Pension Fund Administrators (PFAs) for a number of years to be specified by the Commission shall be entitled to a guaranteed minimum pension as may be specified from time to time by the commission.”
The GMP, he stressed, is akin to an income support from the government and can be considered as a variant of social security policy that ensures redistribution of resources to its populace, as it acts as a safety net for pensioners.
In practice, he said, the GMP is a form of underpin applicable in a Defined Contribution (DC) scheme, such as the Contributory Pension Scheme (CPS) currently being operated in Nigeria, which has a main benefit that is defined contribution in nature, with a promise that the benefit will be at least a Defined benefit (DB) amount, usually a percentage of final salary at retirement date.
The importance the Government attached to the welfare of retirees, he said, has led to the provision of the GMP in the Act. It is however surprising that the PenCom is yet to finalise the modalities, for the implementation of the GMP, more than ten years after the CPS was established in the country, he wondered.