The Senate on Tuesday passed the Pension Reform Bill 2014 which, if formally okayed also by the House of Representatives and assented to by President Goodluck Jonathan, would accommodate employees of private firms in the Contributory Pension Scheme.
The passage of the bill by the National Assembly and assent by the President will automatically repeal the Pension Reform Act 2004.
The proposed law, which covers private organisations with at least three or more employees, is due for second reading in the House of Representatives.
The Senate, after an exhaustive debate on the bill at its Committee of the Whole, voted for its passage and urged Jonathan to sign it into law as soon as possible.
The bill, among other punishments, prescribes a 10-year jail term for anyone who misappropriates pension funds.
This is apart from refunding three times higher, the amount embezzled by him or her.
It also stipulates that whoever attempts to misappropriate pension funds, would on conviction, be liable to the same punishment as it is prescribed for the full offence in the proposed law.
It added that all money received as penalty by the Pension Commission must be paid into the Pension Protection Fund which would have been established under Section 82 of the bill.
In addition to payment of fines and serving the required jail terms, the bill recommends that anyone who misappropriates pension funds must forfeit to the Federal Government, any property, asset or funds with interest on the stolen money.
The bill also imposes a fine of N10m on any pension fund administrator which fails to meet the obligations of the contributors. Each of the directors of the firm would pay N5m as fine.
“Notwithstanding the provisions of any other law, the commission may, in addition to the penalties stipulated under this (proposed) Act, impose additional sanctions on the board, any director, management, manager or officer of a pension fund administrator or pension fund custodian that violates any of the provisions of this (proposed)Act”, a part of the bill added.
The Chairman of the Senate Committee on Establishment and Public Service, Senator Aloysius Etok, while briefing journalists after the session, said the Senate had agreed to peg the number of cognate experience of the PENCOM boss at 10 years.
He said, “When the committee report got to the chamber on the first day of presentation of the report the committee’s recommendation of a fit and proper person was rejected and 15 years of post qualification was adopted.”
So the post-qualification experience for anyone who would be DG of PENCOM is 15 years.
“If you are talking about post-qualification experience what about somebody who has 30 years post-qualification experience with two years cognate pension experience. Is he better than someone with 10 years cognate experience in pension administration?”
So having realised that we have slightly below 10 years professional pension administration experience possessed by anybody in this country, we decided if somebody must have had five years somewhere else and then have additional 10 years cognate experience in professional pension management, that would be a fit and proper person to serve as Director General.
“So, the current situation as contained and accepted is 15 years post-qualification experience for the post of DG PENCOM.”
On the penalty for defaulters, Etok said the Head of Service and heads of different departments have already directed all account departments of government ministries, parastatals and agencies, to make sure that pension deductions were transmitted to the receiving authority(ies).
The problem which PENCOM has continuously explained, according to him, is that people have failed to provide genuine and credible data on themselves, including their PFAs.
He said, “We have like buffer stock funds pending in different places. When the bill is assented to by the President, all the penalties and all the prescriptions contained in it would be followed strictly by the various agencies.
“We have penalties ranging from 10 years imprisonment. For even failing to give proper information, you have to pay N500,000 daily by any agency. And if you embezzle pension funds now, you will pay three times the amount of funds you embezzled.
That is how serious this bill has treated pension funds.”If you embezzle N10,000 you are bound to pay a minimum of N30,000 and in some circumstances, the presiding judge has the right to make you refund and even go to prison.”