New guidelines for mortgage underway

A new policy regime on how contributors under the Contributory Pension Scheme (CPS) can use their contributions to access mortgages is expected to be released by the National Pension Commission (PenCom).

The Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, gave this hint in Abuja Thursday at a stakeholders’ conference on the Pension Reform Act 2014.

She said Pension Fund Administrators (PFAs) could do so now, thus giving most of the over six million contributors access to their fund as equity contributions for residential mortgage.

According to her, “for the first time, you are now able as a contributor to utilise part of your balance to secure your own primary home in accordance with the guidelines to be issued by the commission, this is fantastic in a country where we have over 15 million housing deficit, at least those who are contributing, over six million contributors under the Contributory Pension Scheme, can now for the first time be able to utilise rather than just leaving it there.”

The PenCom boss also revealed that the Pension Act is being reviewed with a view to strengthening the penalties against the perpetrators of pension infractions. The details of the sanctions she said are contained in the new act which will soon be made public.

“The process of issuing these guidelines is already at advanced stage and it is our expectation that as soon as implemented, this development would assist in bridging the housing deficit in Nigeria.”

Anohu-Amazu noted that the contributory pension scheme would soon be introduced in states and local governments as contained in the 2014 Act and this will set a standard which the state governments are required to comply with for the benefit of their respective employees.

The DG said by setting standards which state governments are required to comply with for the benefit of their employees, the application of the CPS by states and local governments has received a boost under the PRA 2014.

Anohu-Amazu said the establishment of the Pension Protection Fund and Minimum Pension Guarantee are some of the innovations of the new act stressing that “the introduction of a minimum pension guarantee so that it doesn’t matter what your contributions are, you are guaranteed a base minimum to satisfy and take care of you in old age.”

Also speaking at the workshop, the Deputy Governor, Operations, Central Bank of Nigeria, Alhaji Suleiman Barau, said workers now have reasons to rejoice given the changes that have so far been recorded in Nigeria’s pension industry.

He observed that there were shortcomings in the old Act, which prompted the need for a review of the Act.

Expatiating, he said apart from addressing the issue of individual contributors, it will also sort out the legacy issues.

– By Ali Smart

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