Preceding the Pension Reform of 2004, which established the Contributory Pension Scheme (CPS), Pension Administration in Nigeria was fraught with multifarious challenges and inefficiencies. The resultant effect of these inefficiencies was lack of accountability and transparency amidst weak administrative structures. However, 17 years since the advent of the CPS, the new system has succeeded, when viewed within the context of the pitfalls that characterised the pension schemes that preceded the CPS.
With apprehension about the safety of pension funds at inception of the CPS, pundits are pleasantly surprised at the relative stability attained as funds under the CPS soar. Here are the key safeguards of the CPS that have ensured transparency and the safety of pension funds.
Ring fencing of pension assets
The Pension Fund Administrator (PFA) manages the pension funds without having direct access to the funds, as custody is vested in a separate entity, the Pension Fund Custodian…
Source: Thisday Newspaper