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The
history of regulated private sector pension scheme in
Nigeria began in 1961 with the establishment of the
National Provident Fund (NPF), which was established
by an Act of Parliament in 1961.
In 1993, the National Provident Fund (NPF) was converted
to a limited social insurance scheme, administered by
the Nigeria Social Insurance Trust Fund (NSITF).
Trustfund Pensions Plc was incorporated by the NSITF,
in collaboration with other institutional investors
and social partners, as a Pension Fund Administrator,
in accordance with the provisions of the Act. The sole
business of Trustfund Pensions Plc is the administration
and management of retirement savings (pension funds).
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| Historical Development |
| The history of regulated private sector
pension scheme in Nigeria began in 1961 with the establishment
of the National Provident Fund (NPF), which was established
by an Act of Parliament in 1961. Its purpose was to provide
income loss protection for employees as required by the International
Labour Organisiation (ILO) Social Security (Minimum Standards)
Convention 102 of 1952. The scheme covered only employees in
the private sector, and the monthly contribution was 6% of basic
salary, subject to a maximum of N8.00 to be contributed
in equal proportion of N4.00 each by the employer and the employee.
In 1993, the National Provident Fund (NPF) was converted
to a limited social insurance scheme, administered by the
Nigeria Social Insurance Trust Fund (NSITF). The NSITF was
a defined benefits scheme and covered employees in the private
sector working for organisations with a workforce of not less
than 5 employees. The initial monthly contribution of members
was 7.5% of basic salary, shared in the proportion of 2.5%
by the employee, and 5% by the employer, but was later in
2002 revised to 10% of gross salary (comprising basic salary,
transport and housing allowances) shared in the proportion
of 3.5% by the employee and 6.5% by the employer.
The Federal Government of Nigeria, in 2004, revolutionized
pension management and administration in Nigeria, with the
enactment of the Pension Reform Act 2004. The Act assigned
the administration, management, and custody of pension funds
to private sector companies, the Pension Fund Administrators
(PFA) and the Pension Fund Custodians (PFC). The Act further
mandated the Nigeria Social Insurance Trust Fund (NSITF) to
set up its own Pension Fund Administrator (PFA) to compete
with other PFAs in the emerging pensions industry, and also
to manage the accumulated pension funds of current NSITF contributors
for a transitional period of five years.
Against this background, Trustfund Pensions Plc
was incorporated by the NSITF, in collaboration with other institutional
investors and social partners, as a Pension Fund Administrator,
in accordance with the provisions of the Act. The sole business
of Trustfund Pensions Plc is the administration and management
of retirement savings (pension funds). |
| Growth and
Success Story of the NSITF |
| Despite the humble beginning, low funding,
and low compliance level, the Nigeria Social Insurance Trust
Fund, grew significantly in every area of its operations from
1961 to 2004. The following are some of the significant growth
areas: |
- The number of registered employers grew to a total of
41,800, while registered members grew to 5 million.
- The net value of pension fund assets under management
grew by 566%, from N6bn to N40bn within the last 5 years
(2000 to 2005) .
- Total benefit payments to pensioners by December 2004
was N440 million.
- NSITF remains one of the few government agencies that
is not funded by the Federal Government. The Fund sustains
itself solely from revenue generated from its operations.
- NSITF has a total of 38 branch offices covering all states
of Nigeria, and with Head Office in Abuja, the Federal Capital
Territory.
- NSITF is a major player in the Real Estate & Property
Development sector, providing affordable houses to Nigerians.
Real estate constitutes a minimum of 29% of its total portfolio.
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- NSITF is a major institutional player and investor in
the Nigerian capital and money markets. Capital
market instruments make up not less than 50% of its total
investment portfolio, with prime investment in virtually
all blue chip and successful companies across various sectors
of the Nigerian economy.
- NSITF has two subsidiaries: Profund Securities Ltd (an
asset management and stock broking company, and Profund
Properties Limited, an estate management and property development
company).
- NSITF sits on the board of the Nigeria Stock Exchange
(NSE) and Central Securities Clearing System(CSCS).
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| This is the sure footing and
solid background on which Trustfund Pensions Plc is founded |
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