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Highlights of the National Conference on the Implementation of the Pension Reform Organized by National Assembly and PenCom. Background . Diagnostic review of the implementation of the pension reform was carried out
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Highlights of the National Conference on the Implementation of the Pension Reform Organized by National Assembly and PenCom
Background • Diagnostic review of the implementation of the pension reform was carried out • Views of various stakeholders on several aspects of the pension reform were discussed • Further deliberations were held at syndicate sessions resulting in various recommendations • Highlights of issues and recommendations are as follows
Issues and Recommendations • Contribution Ratio • Contribution rates should be subject to negotiations • Retirement age/life expectancy • The age for accessing retirement benefit to continue to be in accordance with terms of employment as currently provided for by the PRA 2004 • Gratuity under the Contributory Pension Scheme • Gratuity should be subject to collective bargaining
Issues and Recommendations …contd • Enforcement • PenCom to deploy an automated system for identifying defaulting employers • PenCom to workout modalities for direct invoicing of employers for contributions • PenCom to intensify public awareness campaigns • Create more deterrence and enhance the sanction regimes for defaulting employers • Multiple Funds • The Commission to establish Multiple Funds
Issues and Recommendations…contd • Paucity of Permissible Investment Universe • Broaden the universe (real estate, social infrastructure financing & private equity) • PenCom to support in the drive for tax efficient laws to promote REITs, RMBS & Bonds • Offshore investments not an option in the interim • Infrastructure Financing • Equity and/or debt to be allowed for social infrastructure projects • Social infrastructure to include: • Provision of public services (hospitals, schools and housing) • Projects that have direct impact on economic development (seaports, rail, airports, roads, water & electricity)
Issues and Recommendations…contd • Pension Fund Investments • Investment of pension funds in infrastructure to be either through structured funds or direct participation in well conceived projects • Risk Management • PenCom and operators to enhance risk management capabilities within the industry • Legal Framework • All provisions of the PRA 2004 that violate the provisions of the Constitution to be brought in tandem with the Constitution • Section 5 of the PRA 2004 to be reviewed to allow State administration of estate laws to apply
Issues and Recommendations…contd • The current group life to be expanded to cover disability • Decisions taken by PenCom in dispute resolution to be taken to a Tribunal not Arbitration (Relationship between PenCom , IST & the Federal High Court to be harmonized) • Government to ensure policy consistency and avoid reversals based on short term concerns • The three levels of Government must reach an agreement of how to reach a common goal of contributions and finance all the accrued pension liabilities