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National Assembly passes bill to exit pension scheme, PFAs kick

From Abubakar Y Ojimaojo

The National Assembly has passed a bill to exempt its workers from the scheme, 18 years after operating the Contributory Pension Scheme.

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However, the Pension Fund Operators Association of Nigeria has said that the passage of the bill sets a dangerous precedent for Nigerian workers.

PenOp is the umbrella body for all Pension Fund Administrators and Pension Fund Companies.

PenOp reacted in a statement

Reacting to the move of the market, another analyst described it as incredible. The analyst said: “It’s extremely incredible that the stock market is going up the day before a presidential election…the week or month before the election. In the past, yet-to-date the market should be negative and stocks dropping because of the election.”

Head of Secondary Market, Nigerian Exchange Limited, Mr Kazeem Alimi, said recently that there had been a reduction in the number of foreign investors operating in the local stock titled, ‘Exemption of the National Assembly staff from the Contributory Pension Scheme –Matters arising’. market.

The statement was to draw the attention of the public to the “Bill for an Act to amend the Pension Reform Act, 2014, to exclude/ exempt the National Assembly Service from the Contributory Pension Scheme and establish the National Assembly Service Pension Board; and for Related Matters (HB 2025)” which was recently passed by both chambers of the National Assembly.

“We have seen a gradual slowdown of foreign participation in the market. From the highs of over 60% in 2014, we have seen that slowed down to about 11% at the end of 2022. So, there has been a significant slowdown,” he said on a breakfast programme organised by Vetiva Capital Management Limited.

“Looking at the market in terms of participation, what we have seen so far is a market that has slowed down in terms of participation of foreign investors, while local investors have been

It stated that, “PenOp wishes to state unequivocally that the passage of this bill sets a dangerous precedent that will not augur well for hardworking Nigerians, working across the private and public sector, who depend on the Contributory Pension Scheme for retirement security and stability.

“The introduction of the CPS in Nigeria marked a departure from the unsustainable pension schemes the country had been operating in the past. This scheme has brought transparency, international best practice and able to take up that tab,” Alimi added.

With Nigerian investors having taken over the space left by the departing foreigners, the analyst said local investors believe nothing untoward will happen after the elections.

“At least, one of the presidential candidates will win, and they will just continue what they are doing.

“It is very interesting because if you asked many people, they would have said let us wait till after the elections. But if you had waited, you would have guaranteed peace of mind to millions of pensioners. For these reasons and many more, the need for the above bill is indeed unfathomable and unjustifiable.”

Expressing concern regarding the way the bill was passed, it stated that the passage of the bill seemed to have been unnecessarily expedited and shrouded in secrecy with very little engagement and input from critical stakeholders, as it was passed during the National Assembly’s recess.

The statement said, “Indeed, it missed out because, in the last three months, the stock market has gone up by about 20%,” the analyst said.

He pointed out that the unusual move of the stock market also extended to Nigeria’s Eurobonds. 11 of Nigeria’s Eurobonds, with maturities stretching from November 2027 to September 2051, gained on Friday. The two that fell were the $500m bond maturing this July, and the $1.25bn bond due in November, 2025.

He noted that for the stock market, one could say that is disturbing that this bill did not go through any public hearing, a key component of the legislative process that allows stakeholders to have their voices and opinions heard for possible inclusion in the process.

“If this was done, pertinent issues such as the amendment of retirement age, funding of pension liability, and the potential debt burden on government, all of which are affected by this bill would have been debated and brought to the fore.”

Nigerians don’t care, since they believe the companies are paying good dividends so they are buying shares. “Foreigners are the ones who control the Eurobond; Nigerians hold five per cent. Why are they pushing up the price?”

The analyst warned that if the winner of the presidential poll made any attempt to restructure the country’s debts, Nigeria would become a pariah state.

“Nobody will lend money to anybody in Nigeria. Maybe the market knows that those people are just talking politics,” he added.

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