Unarguably, the process of entrenching a pragmatic and sustainable pension scheme in Nigeria has been challenging. Successive colonial and post-colonial administrations had come up with various schemes as part of efforts to fashion out a sustainable pension system for both public and private sectors’ workers.

The first public sector pension scheme in Nigeria was the Pension Ordinance of 1951, which retroactively took effect from Jan. 1, 1946.

The law allowed the Governor – General to grant pensions and gratuities in accordance with the regulations, which were reviewed from time to time with the approval of the Secretary of State for Colonial Affairs in the United Kingdom government.

Under the 1951 Pension Ordinance, public service workers were entitled to pension after 10 years of service.

However, although pensions and gratuities were provided for in the Ordinance, they were not a right as they could be reduced or withheld altogether, if it was established to the satisfaction of the Governor‐ General that the officer was found guilty of misconduct, negligence, irregularity, among others.

Besides, the first private sector pension scheme in Nigeria was set up in 1954, for employees of the Nigerian Breweries , which was followed by United African Company (UAC) in 1957.

To accommodate the interest of non-pensionable private sector employees, the National Provident Fund (NPF) was established in 1961.

Under the NPF, both employees and employers contribute N4 on monthly basis to the scheme, which provided for a one-off lump sum benefits for retirees.

To address the challenges associated with the various pension schemes, the Pension Act No.102 was instituted in 1979, followed by the Armed Forces Pension Act No. 103.

In 1987, the Police and other Government Agencies Pension scheme were also established under Pension Act No.75 of 1987.

In 1987, the Local Government Staff Pension Board was established to take care of pension matters among local government employees.

Apparently dissatisfied with the operations of the various pension schemes, the National Social Insurance Trust Fund (NSITF) was set up in 1993.

To further address the problems of delay usually experienced by pensioners in accessing their entitlements due to the non-contributory nature of previous pension schemes, the Federal Government came up with a new pension reform in 2004.

The reform facilitated the passage into law of the Pension Reform Act 2004 and the establishment of the Contributory Pension Scheme (CPS), which is a uniform pension system for both the public and private sectors.

Similarly, for the first time in the history of the country, a single authority, the National Pension Commission (PenCom) was established to regulate and supervise all pension matters in the country.

The scheme is being managed by licensed Pension Fund Administrators (PFAs), while the custody of the pension fund assets are provided by licensed Pension Fund Custodians (PFCs).

However, 10 years down the line, economic analysts believe that the scheme has been successful as it has become a model for most African countries.

This, they note, informs the decision by the World Pension Summit Group to allow Nigeria to host the summit for two consecutive times.

Interestingly, the National Pension Commission (PenCom), which manages the scheme, says the fund has accumulated over N5 trillion in the last 10 years.

Addressing the second edition of the World Pension Summit, Africa Special, held recently in Abuja, PenCom’s Director-General, Mrs Chinelo Anohu-Amazu, said that the summit with the theme: “Building Sustainable Pension Systems in Africa,” was designed to bring up practical and enduring strategies for pension fund regulation in the continent.

She said that sustainable pension systems in Africa were reflective of the emerging consensus of the continent on the need to institutionalise a robust pension system.

Anohu-Amazu said that the aim of the summit was to evolve measures to tackle the plethora of development challenges that plagued Africa in the 21st Century.

She said the summit was also in line with the multilateral paradigm shift of promoting sustainable development goals within the institutional framework of the United Nations 2030 Agenda for sustainable development.

Anohu-Amazu said that the summit would discuss the most appropriate strategies for leveraging pension funds in the continent to boost the execution of critical infrastructure projects.

The director-general said that infrastructure development, undoubtedly, remained a key enabler of sustainable development in Africa.

She said that the current rapid increase in the size of pension funds in the continent had provided a rare opportunity for multi-sectoral collaboration in bridging Africa’s infrastructure deficit.

She said that the summit would focus on the long-term sustainability of pension systems in Africa.

“This summit shall facilitate the setting out of economic pre-conditions and initiatives that are needed for longer-term growth as well as to foster poverty eradication,’’ she said.

According to her, it is important for regulators to consider issues of unemployment, diseases, poverty and climate change in designing their pension regulatory framework.

Anohu-Amazu said that the pension industry recognised the creation of long-lasting return on pension assets.

She explained that the recognition was dependent on transparent, predictable and well governed environmental and economic systems that were underpinned by clearly defined prudential regulatory guidelines.

The director-general said that pension managers all over the globe were changing their mandates to reflect considerations of sustainable investment and growth.

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According to her, the PenCom is committed to mainstreaming sustainability strategy and practice in the discharge of its statutory functions.

Anohu-Amazu said that the summit had initiated the Africa Pension Award (APA) for the 2015 edition.

She said that the award would seek to, among other things, identify excellence, highlight sustainable achievements and engender home-grown development of African pension industry.

According to her, it would create an opportunity for African countries to share experiences on best practices in the development of their respective pension industries, while fostering positive local and global perceptions.

Sharing similar sentiments, the Chairman of World Pension Summit, Mr Erick Eggink, said that the pension summit was meant to inculcate relevant knowledge of pension administration in pension professionals in Africa.

Eggink said that the summit became necessary as a result of introduction of new reforms in the Africa pension systems.

He said that the reforms were designed to improve Africa pension systems, noting that the idea was to share global best knowledge on how best to run the pension industry.

Acknowledging the success of the contributory pension scheme, Gov. Udom Emmanuel of Akwa Ibom says his administration is ready to invest in the pension industry to generate income for the state.

He said that the accumulation of N5 trillion pension fund in the country could create a lot of investment opportunities for interested investors.

“The main reason for this is with over N5 trillion, which is over 25 billion dollars, we have a whole lot of investment opportunity, where we are doubly sure the pension fund can actually be invested and they can also realise the money because that is the essence of investment.

“You don’t invest to lose your capital; you invest to actually get adequate return on your investment.

“Even in terms of road infrastructure, the economic viability of the roads in the South South zone is being linked up by Akwa Ibom.

“So, we can actually earmark some of these for the investors to come under the PPP (public private partnership) model.

“We as a state government will also be interested in taking up some equity,“ he said.

The governor, however, advocated the setting up of an institution that would ensure proper and accurate remittance of pension contributions.

“Once you set up strong institutions, those things are mere administrative.

“We are after building those strong institutions so that processes and procedures can actually run normally.

“So, set up strong institutions and things will happen – policies, procedures and processes will actually run,’’ he said.

Echoing same viewpoints, Mr Gerard Lyons, a British economist and Chief Economic Adviser to Mayor of London, urged Nigeria to invest some portion of its pension assets in infrastructure.

Gerard stressed the need for the emergence of a stream of infrastructure projects in the country, noting that the country should focus on hard, soft and institutional infrastructure, which in turn would help address social infrastructure.

“Hard infrastructure opportunities include broadband and transport, such as road and rail as well as housing and energy,” he said.

He explained that soft infrastructure entailed building the skills and the education needed, while institutional infrastructure was linked to openness and transparency.

Gerard said that the building of strong institutions would usher in confidence enabled growth that would create greater investment stability and ultimately lead to the entrenchment of rules and regulations.

The British economist said that Nigeria should be proud of the progress made by PenCom since the introduction of the Contributory Pension Scheme.

He said that it was important for Nigeria to continue to build on the progress, while embracing change in other areas as it was planning for the future.

“Regionally, Africa is globalising at a fast pace and I think ‘Pan Africanism’ may become a more common future term, capturing the mood of the time.

“In this context, Nigeria can assume a greater regional role as it is already doing in West Africa,” Gerard said.

Nonetheless, critics of the Contributory Pension Scheme have advised the operators of the scheme to fully comply with the provisions of the Pension Act.

They specifically insist on compliance which requires the payment of 50 per cent of a pensioner’s entitlement upon retirement, provided such a pensioner attained the mandatory retirement age of 60 years.

Such critics also frowned at the unnecessary delay in the payment of pension entitlements to retirees.

They further want the government to take a holistic look at the Pension Act, to enable pensioners to benefit from the interests accruing from pension fund investments.