Managing Director, Crusader Sterling Pensions Ltd,Mr. Niyi Falade, is a chartered accountant and an investment banker. He had served as Managing Director of Lead Capital and Head of both Investment Banking Group of Ecobank Nigeria Plc and Lead Bank Plc. He spoke toSEYE OLUMIDE about the ongoing scam and investigation of the Police Pension Scheme, pointing out the difference between the old and the new scheme.How would you describe the scam in the Police pension fund'It is mind-boggling, to say the least. Even though we know the old pension scheme had fundamental flaws with weak administration systems, we never imagined it could have sustained such monumental fraud. The development gives credit to the administration of former President Olusegun Obasanjo for having the vision to create the new pension scheme in 2004.Does the ongoing revelation and scam in anyway suggest that a similar thing may occur with the Pension Fund Administrators (PFA)'It is unfortunatebecause many people do not know the difference between the new and old pension scheme. We are concerned that people may have the wrong impression that the pension scam has something to do with the new pension scheme. But the truth is that it is impossible for such a thing to happen with the PFAs, because it is easy for contributors to monitor their funds, at least, on monthly basis.If there is a new scheme, how come the old scheme is still running' Does this suggest that the 2004 Pension Act is ineffective'The old scheme is called deferred benefit scheme (DB) while the new one is called the Contributory Pension Scheme (CPS). The CPS scheme, as you know, was created in 2004. This exempted some categories of public servants and made provisions for the continuity of the pension departments administering them. These pension departments are also allowed to continue to manage pensions of pensioners existing before 2004. This is what led to the concurrent operation of the two schemes. I agree with you that the 2004 Act should be amended immediately to bring the old scheme under the supervision of the new scheme in order to stop the rot.How would you give assurance to contributors about safety of their money'Many safeguards have been built into the new CPS scheme to ensure safety of funds but I will name a few. Management and administration of pension funds is properly segregated from custody; only licensed PFAs now manage and administer pension funds while custody of the funds resides with licensed Pension FundsCustodians. Contributors under the new scheme have personalised and portable Retirement Savings Accounts (RSA), which they have access to everytime; and they are free to change their PFAs once a year. The new scheme is also regulated by the National Pension Commission, unlike the old scheme that was not regulated.Can you speak about the operations of your organisation'As one of the PFAs, we manage pension funds and assets of workers and have customers from all over the country. We also have offices and presence in most states of the federation. We started our business with a mission to create superior returns for all our stakeholders and I am quite pleased that this mission is already being achieved.Responsibility of the PenComIt was set up to ensure compliance with the Act. Apart from the 2004 Act, PENCOM issues guidelines from time to time to regulate the management and investment options of pension funds. Steps have already been taken to review the 2004 Pension ACT in order to improve on some of the provisions; and I believe this is the way forward.The current development further raised fear on whether contributors will be able to access their savings when they retire.Could you clarify this'There should be no fear about this at all. Retirees under the new scheme are already accessing their benefits. I will say it is better to speak to some of them to know how delighted the experience is. Payments are made directly to retirees' bank accounts unlike in the past when they had to stay in queues to get paid. The whole issue boiled down to corruption in the system.Could you suggest ways Nigeria can tackle corruption particularly in the pension scheme'Transparency is one way. The new scheme is transparent and has afforded contributors platform, via their Retirement Savings Accounts, to monitor their monthly contributions and challenge the competence of administrators in managing their investments. This safeguard alone amongst others surely inhibits.
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