Contributors and beneficiaries of the new pension scheme are
major players in the pension industry, unlike in the previous era, the
Director-General, National Pension Commission (PenCom), Alhaji Mohammed Ahmed,
has said.

He said there were checks and balances in the system, and
the various regulations passed by PenCom over the years had been geared towards
more openness, transparency and empowering contributors and beneficiaries.

He, however, explained that the revelation of corruption in
the administration of pensions in the public sector coming out of the National
Assembly’s probe and the reports of inability of contributors to access their
funds immediately they retired, were another source of concern.

“However, all those belong in the nascent pension scheme,” he
stated.

Speaking to journalists in Lagos, Ahmed said, “The new
pension scheme called the Contributory Pension Scheme is a simple antidote to
the complexities of the past scheme, and the new scheme will ease the problem
of retired workers going through hell to get their retirement benefits.”

The PenCom DG said the new scheme, “is robust, safe and is
poised to help retirees live well after their active life in employment. To a
large extent, the new pension scheme has placed in the hands of the contributor
the responsibility for the contribution that is available in the Retirement
Savings Account upon retirement.”

He also said, “Participants would have to take their destiny
in their hands and there lies one of the major differences between the new
system and the previous system.”

Another major difference, he added, was that while
pensioners in the old system travelled long distances to be verified, the local
office of the Pension Fund Administrator managed that level of interface
without any stress, thereby removing the need for continuous verification of
pensioners.

According to him, in the new scheme, the contribution is 7.5
per cent of the consolidated (total) monthly earning, and not just of the basic
salary.

“Thus, 7.5 per cent is deducted from every participant
worker, and the employer adds another 7.5 per cent monthly. The savings are
secure and no worker would be shortchanged at the end of the day,” he said.

The Federal Government in 2004 enacted the Pension Reform
Acts aimed at ameliorating the sufferings of retirees in the country.

This law changed the entire pension system from one in which
employees looked forward to their employers paying their gratuity and a
reasonable pension on retirement, to one in which what the employees get when
they retire is what they contributed to their pension fund when they were in
active employment.

One of the most fundamental differences between the two is
the fact that the post-2004 era avails the contributor or pensioner of a lot of
information, ranging from monthly balances and contributions, the lump sum
available upon retirement, to monthly pension.