The Pension Reform Act 2014 has consolidated earlier amendments to the 2004 Act, which were passed by the National Assembly. These include:
1. The Pension Reform (Amendment) Act 2011 which exempts the personnel of the
2. Military and the Security Agencies from the CPS
3. The Universities (Miscellaneous) Provisions Act 2012, which reviewed the retirement age and benefits of University Professors.
4. The 2014 Act has incorporated the Third Alteration Act, which amended the 1999 Constitution by vesting jurisdiction on pension matters in the National Industrial Court.
The major highlights between the PRA 2004 and PRA 2014 include:
1. Under the repealed Act, the contribution base for an employee and employer were 7.5% of the employee’s monthly emoluments respectively; however, the Act provides for an employee and employer contribution base of 8% and 10% of the employee’s monthly emoluments respectively. Where the employer opts to bear the full responsibility of both contributions, he would pay a minimum of 20% of the employee’s emoluments. This deduction is made before applying PAYE.
2. The Act applies to employees in both the private and public sectors. There greater participation of Private organizations
3. The Act places an attempt to commit a pension offence on the same pedestal with actual commission of the offence. It stipulates the same penalty for an attempt to commit an offence and the actual commission of the said offence. The Act stipulates increased and stringent penalties for misappropriation. Upon conviction, a pension fraudster will be liable to a minimum of 10 years imprisonment, a fine of three (3) times the amount misappropriated and forfeiture of assets and funds in his/her control to the Federal Government.
4. The Act now incorporate fine upon conviction, where a PFC fails to hold funds to the exclusive preserve of the PFAs and PenCom.
5. Furthermore, the courts vested with jurisdiction can lift the veil of incorporation when necessary to punish directors of corporate bodies involved in any of these offences.
6. Under the new Act, aggrieved employees and parties can approach the Commission, the Federal and State High Courts as well as the National Industrial Court to seek redress. This is an improvement on the former Act which provided arbitrator tribunals and the Investment and Securities Tribunal (IST) as the mediums of dispute resolution.
7. An employee who has lost his job and is under the age of retirement can now access the funds if after 4 months from disengagement he/she is still unemployed. The waiting period under the old Act was 6 months.
Various remedial sanctions and corrective measure were either introduced or enhanced in addition to Pencom’s punitive powers to revoke the licences of erring PFAs and PFCs. These were all in effort to fortify the pension assets against mismanagement and systemic risks. As at the end of May 2020, the assets under the scheme rose to N10.8 trillion.
On 30 July 2020, PenCom’s Head of Corporate Communication, in a statement in Abuja, made known that PenCom is set to initiate a review of the Pension Reform Act (PRA) 2014. He said some challenges were subsequently encountered in the implementation of certain sections of PRA 2014, and that a review would help to reposition the CPS and consolidate the gains of the pension reforms for the benefit of Nigerians.
It is expected that the review will incorporate inputs from social partners, pension industry operators, financial regulators and other relevant stakeholders.