Pension Managers Have Reduced Retirees’ Death In Nigeria – Ideva | Independent Newspapers Limited
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Pension Managers Have Reduced Retirees’ Death In Nigeria – Ideva

Posted: Jul 30, 2015 at 12:23 am   /   by   /   comments (0)

Managing Director of Premium Pension Limited, Wilson Ideva, in this interview with with journalists, speaks on the new Contributory Pension Scheme in Nigeria, compares it with the old defined benefit scheme, highlights the impacts of the scheme on the nation’s economy, among other issues. SOLA ALABADAN was there. Excerpts:

As one of the licensed pension fund administrators in Nigeria, can you tell us what Premium Pension Limited stands for?

In line with the Pension Reform Act 2004, all the Pension Fund Administrators (PFAs) were licensed by National Pension Commission and Premium Pension was one of the very few that were licensed in 2004. We are in our tenth year as a Pension Fund Administrator. But I will say that in the last 10 years, we have been able to distinguish ourselves in the pack of all the PFAs and we have made tremendous impact both on our clients and on our economy; making contributions silently without announcing such.

From Retirement Savings Accounts (RSAs) that started from zero in 2004, we now have Asset Under Management (AUM) in excess of N380 billion. And we have funded RSAs of over 400,000. Of course, the registration is well over 500,000. But we have funded RSA of over 400,000. And so far, we are in all the states of the federation. But we have what we call approved branches which are in about nine locations and we have recently opened up six branches awaiting the approval of our regulators which is National Pension Commission (PenCom). We also have what we call Pension Centers which are all over the 36 states of the federation and in some states we have more than one or two Pension Centers.

The idea is that we have to be widespread because we are dealing with both the public and private sectors and we don’t want our clients to be looking for us. Anywhere we are, we want our clients to see us. The issue of pension is a very serious issue. It is highly emotive. Our past in Nigeria with regard to pension management has not been pleasant. But I will beg to say that we are determined to let the world know that Nigerians can do it and we can do better and that is why you will see that money and time have been spent on this corporate headquarters in terms of structure and working technology.

Also in terms of retirement, we are managing over 16,000 retirees and we are paying them as and when due, on the 19 of every month, to be precise. I think so far we have paid out at least N81 billion in terms of retirement benefits whether in monthly withdrawal, so that is where we are.

 

More than 10 years after the contributory pension scheme was introduced in Nigeria, how has it impacted on the economy?

Before now, when you talk about pension in this country, people talk about pension with so much fear and with so much hatred and you wouldn’t blame them because of what was happening then. There were endless queues of retirees waiting to be paid their pension that was not even forthcoming because what used to happen was that under the old pension scheme which we referred to as Pay-As-You-Go. Every year, we had what we called budget provision by the government where pension was based on the availability of funds. But there was no fund set aside, so pensioners were not being paid.

Today, you are no more seeing those queues. Is it that people are not retiring? People are retiring. The difference is that under the new scheme workers or prospective retirees have fully funded Retirement Savings Accounts. Before you retire, you already know how much is in your RSA. You can also be told what you will be getting as your monthly pension. So, it is not like when you will be waiting for governments that are going to be looking for money to pay you, the money is already there. So, the Contributory Pension Scheme has removed the queues that we used to have. We have also put smiles on the faces of our senior citizens. The difference is that when you have money you can plan for it no matter how small it is.

So, in terms of how the pension scheme has impacted on this country, I am sure that you are aware that we have amassed colossal sum in terms of pension assets in the industry. I think, for now, it should be in neighbourhood of N4.7 trillion; it keeps increasing every day. And if you get a breakdown of the investment portfolio, you will see that the Federal Government takes some of this money in terms of bonds and in turn use it to improve infrastructure. I am sure despite the problems of this country, there are areas of improvement, if you travel by road, you will see that some of the roads have been tarred and the railway is coming up. Because if you have about N5 trillion and about 60 to 70 percent is in government bonds, you can work it out to know how much we are putting in those areas and we are also going to start investing in infrastructure such that RSA holders can also access low cost houses and use their RSA balances as guarantee for such facilities.

That is what we have under the new investment guideline. That is where we are going to. But before now, these are areas where people didn’t seem to have seen the impact. But I can assure you these are where we are making impact; contributing to the development of the country.

We have also helped to wipe out the queues of retirees waiting to collect pension. Did you see any queue when you arrived here? But we are managing 16, 000 retirees. We have depended on technology. Once you register with us, we know your bank details and on the 19th of every month, we pay you. You don’t need to be here, you can be anywhere in Nigeria and even overseas. We do e-payment and transfer your money to your account wherever you are in the world. Once you have debit card, you can access your money and you don’t need to come to us again. In fact, people are getting paid more regularly now than when they were working. So that is the beauty of it. This is where the pension industry is contributing in financial development and also helping to ensure stability.

The life span of people is going to be improving because what leads to early death is suffering. When you retire and you are waiting for pension that will never come in a year and you are not fortunate to have siblings or children who will take care of you, it is a recipe for early death. But that we have been able to reduce significantly.

 

What is your take on the Pension Reform Act 2014 passed by the 7th National Assembly? Do you think it has addressed the challenges facing the pension scheme in the country?

Anything that is new, there is always room for improvement. So what the Pension Reform Act 2004, the initial Act, tried to do was to bring sanity to the administration of pension in Nigeria. And I think largely that was achieved, if you asked me.

Having achieved that within 10 years, there was need for what we have seen as operators for there to be an amendment which also took place in 2014 which is called Pension Reform Act 2014 as amended. The amendment has taken largely into consideration all the challenges that we envisage, or that were encountered within the 10 years of operations. I think we should just run with this for the time being. And we will see what happens again in the next five or 10 years. The last amendment largely took into consideration all our expectations and aspirations. But of course, in anything in life there is always room for improvement. So in the next five or 10 years, there could be other challenges that will necessitate other amendments.