The Managing Director of Premium Pension Limited, Mr. Wilson Ideva has said that the new contributory pension scheme would soon be pivotal to the social and economic development of Nigeria.
“The more people identify with and subscribe to the new pension scheme the more people remain assured of a secure future and the more funds are amassed under the scheme for national development” said Mr. Ideva.
“Some of the remarkable infrastructural development witnessed recently have benefitted from pension funds invested through government bonds.”
Mr. Ideva pointed out that various other sectors would begin in no distant time to benefit from the scheme.
“The previous unfunded defined benefit scheme remains a far cry from the new contributory pension scheme in terms of the advantages and possibilities unpacked by the latter” he said.
“While the old defined benefit scheme left a deficit of over two trillion Naira and contributed to the numerous huddles in the payment of pension benefits, the new scheme is closing in on the sum of five trillion Naira as funds under management even with less than 10% market penetration.”
He further noted that while the old scheme was fraught with corruption and inconsistencies, the contributory pension scheme has made life more comfortable for retirees and kept corruption at bay.
“Since 2004 I do not think that people still queue up to access pension benefits” he said. “People now go to their pension fund administrators to get their benefits as soon as they retire.”
Against the backdrop of the reviewed Pension Reform Act 2014 which has among other things extended the scheme to the informal sector, Mr. Ideva stressed on the need for increased public awareness to enable the industry to profit from the inherent immense opportunities and also erase the negative impression inherited from the old scheme.
“The unpleasant activities associated with the old scheme are still negatively affecting the attitude of some Nigerians towards the new scheme” he noted. “We now have what we call transfer of negative impression in the industry.”
Mr. Ideva concluded that there is every need to dissociate the new contributory pension scheme from the old unfunded defined benefit scheme and position the industry for growth to the next level.