Micro pension to revolutionise pension industry- Fajemisin

By ABDUL OLALEKAN

The pension industry will witness another revolution by the time micro pension scheme commences in the pension sector of the country, as it will incorporate about 70 per cent of Nigerians in the informal sector of the country into the new pension scheme, said Chief Executive, Stanbic IBTC Pension Managers Limited, Mr. Eric Fajemisin.

Fajemisin, who stated this at a media parley in Lagos, described the proposed micro pension scheme as having the capacity to deepen asset accumulation in Nigeria, which will also provide the vital capital required for investment in critical sectors of the nation’s economy.

He stressed that the scheme, when finalized, would enhance improved standard of living for the elderly, guarantee the safety of funds and may provide access to other incentives, such as mortgage facilities and health insurance.

Fajemisin listed other benefits likely to be included in the proposed scheme as flexible contribution remittances, the opportunity to make withdrawal prior to retirement and the enhancement of financial inclusion and attainment of economic stability objectives.

While highlighting the challenges confronting the scheme, he stressed that insufficient awareness and negative perception towards pensions, modest financial literacy in the country, the high cost of carrying out awareness of the Contributory Pension Scheme (CPS), lack of reliable data on the informal sector and low buy-in by unions in the sector, among others. These challenges, he noted, are expected to be addressed prior to commencement of the scheme and thereafter.

On the enabling law, the Stanbic IBTC helmsman noted that the introduction of more stringent penalties for erring operators and directors, especially as it relates to mismanagement of funds, has engendered greater corporate governance, making it almost impossible to misapply pension funds by anyone.

By increasing the contributions of the employer and employee to 10 and 8 percent respectively, Fajemisin said the Act has ensured the availability of more benefits to contributors at retirement.

Fajemisin restated that the CPS, with 7.3 million registered Retirement Savings Account (RSA) holders, presents a clear path for employees to maintain and enjoy a life of comfort in retirement.

He said as people head towards retirement, a decision about the type of life they wish to live in retirement should not be made from the hip, but rather through a well-structured financial planning process. The process, he said, should commence from the day one takes on a first job and involves setting aside part of current income into a retirement savings account.

Stanbic IBTC Pension Managers Limited, he assured, remains committed to rendering impeccable service to its clientele. “We make a promise to our clients: that they will retire very well. It is a promise we keep. That explains why we are represented in virtually every part of Nigeria, so that our customers will not have to go over long distances in order to meet with us. Retirement is a time to rest and enjoy the fruits of your labour,” he said.