The National Pension Commission (PenCom) is proposing amendments to the Pension Reform Act of 2014 in order to correct some inaccuracies in the six-year-old piece of legislation.
A copy of the proposed amendments seen by TheCable shows that the commission is seeking to reduce the powers of the minister of finance and cede some power to the president of the country.
It also seeks to correct some typographical errors which scaled first reading, second reading, third reading, and presidential assent to make it into the final act in 2014.
The propose correction seek to “amend to read that the appointment of the Executive Secretary of the Pension Transitional Arrangements Directorate shall be made by the President”
The commission argues that “the appointment of the Executive Secretary, who is the head of the Agency cannot be made by the Minister”.
It adds that the power to appoint a permanent secretary in any ministry or head of any extra-ministerial department of the government of the federation is exclusively the president’s — “in line with Sections 171 (1) and 171(2)(d) of the 1999 Constitution (as amended)”.
This automatically increases the power the president has over the commission.
In pure mathematics 10 plus eight equals 18. But in the Pension Reform Act of 2014, 10 plus eight equals 20.
Section 4(1)(a) and (b) of the PRA 2014 stipulates a minimum of 10% contribution by the employer and a minimum of 8% by the employee, totaling a minimum of 18% monthly contribution in respect of the individual.
But section 4(4)(b) in stipulating that an employer may elect to bear the full burden of the monthly contribution, erroneously stipulated the total; monthly contribution as 20%. This is incorrect.
The commission, therefore, sees the need “to amend the figure 20% to read 18% in order to align with Section 4(1)”.
The proposed amendments seek the deletion of “the phrase ‘or outside’ from section 72 of the existing act. The aim of the correction is to disallow pension fund managers from opening branch offices abroad.
“It is noted that the businesses of Pension Fund Administrator and Pension Fund Custodian are undertaken within Nigeria, hence it is superfluous to allow PFAs and PFCs open branch offices outside Nigeria,” the proposed amendment read.
The commission says “the legal framework outside Nigeria may not permit such an arrangement. Lastly, it is noted that the Commission would not be able to monitor branch offices of PFAs and PFCs outside Nigeria”.
PFAs with foreign offices may have to shut them down following this amendment.
The commission has also noted some typographical errors in the 2014 Pension Reform Act, and is seeking to correct the typos.
According to the document seen by TheCable, there are at least 14 typographical and cross-referencing errors in the pension act, which the commission, under the leadership of Aisha Dahir-Umar seek to correct.
One such minor errors include the “deletion of the comma in the phrase ‘Constitution of the Federal Republic of Nigeria, 1999 (as amended)’ to read Constitution of the Federal Republic of Nigeria 1999 (as amended)'”.
Other amendments include provisions for the power of the board to approve the commission’s budget.