The Pension Fund Operators Association of Nigeria (PenOp) in partnership with selected Non- Government Organisations (NGOs) have provided free treatment for various levels of ailments for about 1000 elderly people in Lagos.
The elderly people were treated of various ailments such as prostate cancer, hernia, breast lump, diabetics, and general surgeries conducted by surgeons, gynecologists, oncologists, nurses and other medical experts.
Executive Secretary of PenOp, Susan Oranye who spoke during the week-long exercise, code named Project Gray 2.0 said the initiative is in line with its Corporate Social Responsibility (CSR) project in the country.
She said operators understand that having a pension to fall back on in retirement and good health is the main focus of many elderly men and women.
She added that it is this commitment to the wellbeing of old people that led to PenOp’s collaboration with the Orange Health Initiative in ensuring that the old people have unhindered access to medical checkups and treatments for this week.
She said: “The Project Gray 2.0 is an initiative that celebrates the World’s Elders’ Day. Now, it is important that as a country and as a people we take care of our elderly, make sure that in retirement they can, at least, maintain a decent standard of living. This is the ethos that guide the pension system in the country.
“PenOp is exceedingly excited about this programme because this project marks the kickoff of first Geriatric Hospital in Nigeria and this is something we are passionate about.”
Chairman of Legus Foundation and Founder of Veteran Hospital, Dr Kola Adeyina who in Lagos metropolis where the elders are currently receiving treatment said the project slated to last for one week is conducted by specialists from different medical callings.
The medical expert who said he has been treating Nigerian children free since 1977 said the project would cost the organisers over N20 million.
Coordinator of Orange Health Initiative, Dr. Kunle Megbuwawon, who believes that getting to the golden age is a privilege that eludes many, said that the goal of the programme is to take care of 1000 elderly people with about 50 of them undergoing surgeries, while at least 15 of them are expected to undergo cataract operation and can go home smiling at the end of the exercise.
He said Project Gray was borne out of the passion for elderly people in the society and aims at turning the Legus Specialist Hospital into the first Geriatric Hospital in the country.
Mrs Bimbo Olateju, an old retiree said she is very happy with the free drugs and test she received.
Another elderly man who simply identified himself as Mr Kunle said: “I am very grateful to them because as an old man, I don’t have the money to go to the hospital or get drugs for myself but with this free drugs and test I am getting, I am truly grateful”.
Since its launch 35 years ago, Chile’s retirement system has been hailed as “best in class” by pension experts near and far.
The country’s fabled individual and privately-managed accounts include around 10 million affiliates, hold $160 billion in investments, and pay retirement benefits to over a million retirees. So why did President Michelle Bachelet establish a Pension Reform Commission that just delivered to her 58 specific reforms and three comprehensive proposals to overhaul and remodel Chile’s retirement system?
One motivation for all such commissions, and this one was no exception, is to offer a sounding board for popular opinion. During the year I served with the group, much grumbling was heard about low benefits and the system’s so-called “social illegitimacy.”
I attribute some of the complaints to widespread ignorance of how the system actually works, since only a handful (19 percent of men, 11 per cent of women) know how much they contribute to the accounts: 10 per cent of pay. This underscores my own research showing that most Chileans had no idea how much they paid in commissions, how their money was invested, or how their benefits would be determined at retirement. Only one-fifth of the participants had the faintest idea about how much money they held in their accounts.
So financial illiteracy is a big problem, and not one confined to Chile. Yet the nation’s failure to educate its citizenry about how their pensions work and their role in retirement security is central to why three-quarters of the population now feels that a major overhaul is required.
In the course of our work, we learned that Chile’s retirement system actually does a rather remarkable job of protecting against old age financial destitution. This is because means-tested government benefits were implemented in 2008 to support those who contribute little to their private accounts. After this, extreme elderly poverty dropped to 1.6 per cent. Adding the means-tested to the self-financed pension generates replacement rates of about 64 per cent, levels even above what retirees in the US get from social security.
Yet important holes in Chile’s retirement system fabric remain. Women who don’t work for pay have no pensions, nor do the self-employed (the latter were actually not required to contribute to their retirement, a problem the government now seeks to rectify). Even more concerning is the fact that Chilean women may retire at age 60, five years younger than men. As a result, they end up with extremely low benefits due to their longer life expectancy and lower life-time wages. Our Commission therefore recommended raising women’s (and men’s) retirement ages and adopting a unisex life table, to help boost older women’s living standards.
Through the Contributory Pension Scheme (CPS), Nigeria has been able to grow pension funds to over N5trillion. With this feat, experts from Africa and other parts of the world say Nigeria is on the threshold of becoming a regional leader and a major global player in the pension industry, Omobola Tolu-Kusimo writes.
The Nigeria pension industry has started gaining global recognition and attention with its growing pension fund of over N5 trillion under the Contributory Pension Scheme (CPS).
Experts from the African continent and around the world say with this asset, Nigeria is on her way to becoming both regional and global player.
This has brought leading players and decision makers in the pension industry in Africa, as well as key figures in finance and pensions from across the world together to discuss the way forward for the pension industry in Africa.
Delegates from around the world who participated at the two days event organised by the National Pension Commission (PenCom), Nigeria and the World Pension Summit, the Netherlands held in Abuja, therefore, charted a future for Africa with the theme, “Building Sustainable Pension Systems in Africa.”
According to the Director-General of PenCom, Mrs. Chinelo Anohu-Amazu, the theme of this year’s summit is reflective of the emerging consensus on the African continent on the necessity of institutionalising a pension system that is robust enough to tackle the plethora of developmental challenges that plague Africa in the 21st century.
She stated that it is also in line with the multilateral paradigm shift of promoting Sustainable Development Goals (SDGs) within the institutional framework of the United Nations 2030 agenda for sustainable development.
An expert on global economy, financial markets and Policy Adviser to Mayor of London, Dr. Gerard Lyons, examined Nigeria from a global, regional and national perspective and focused on the implications of the huge funds for the economy, infrastructure and pension funds.
Lyons focused on the changing global environment that has resulted in greater uncertainty, more volatility, desire by investors to search for yield and growth opportunities, and the need for markets to price for risk.
He said regionally, Africa is globalising at a fast pace adding that ‘Pan Africanism’ may become a more common future term, capturing the mood of the time. In this context, Nigeria can assume a greater regional role, as it is already doing in West Africa, he said.
To appreciate the domestic challenge, Lyons gave the foreign view of Nigeria, what is being said, and also where he felt it was right and wrong.
He said there is unease about corruption and concern about security. It is good therefore, that the administration is addressing these head on, he said.
He noted that it is also important to remember that in a world of high debts, Nigeria’s debt position is a big advantage and gives it room for fiscal flexibility. Its market size, young sizeable population, entrepreneurial spirit, and the growth of its service sector are also key positives that should not be overlooked.
He advocated investing a portion of the country’s pension fund assets into infrastructure and emphasised the need for a stream of infrastructure projects, stating that the country should focus on hard, soft and institutional infrastructure, which in turn would help address social infrastructure.
He said: “Hard infrastructure opportunities include broadband and transport such as road and rail as well as housing and energy.
“Soft infrastructure is building the skills and education needed, while institutional infrastructure is linked to openness and transparency, as strong institutions allow confidence, enable growth and greater investment and create stability.
“Regulations, rules and laws are also vital so Nigeria should be proud of the progress made by PenCom on this so far. However, it is important that the country continues to build on this progress, embracing change and planning for the future.”
Founder & Chairman, World Pension Summit and Founder & Chairman WPS Africa Special, Harry Smorenberg, noted that building sustainable pension systems in Africa will require securing a sustainable pension provision for all should be top-priority.
He said PenCom and other regulators should educate and communicate with the people and leap-frog on key lessons learned,
Smorenberg also spoke on how to provide old-age income security to all. He noted that more and efficient social security systems is needed while the pace of ageing and consequences of longevity call for action.
Professor of Risk Management, VU University Amsterdam and Chief Executive Officer, Cardano, Theo Kocken on his part said care should be taken when considering how to sustain the pension scheme and assets.
He warned that there are areas that must not be copied from pension system in Europe and the United States. Speaking on lessons from investments in pension funds, he said risks are always deeply under-estimated, noting that it equates worldview in a world that is actually endogenously unstable. “When risk gets higher, perception of risk gets lower, and real diversification is difficult in an interconnected capital market. Risk premium ex post higher than productivity growth: Ex ante low expectations for the future?
Anohu-Amazu said compared with many of its African peers, Nigeria has relatively advanced infrastructure networks that cover extensive areas of the nation’s territory. “Thanks to its strong economy, it is better placed than many of its neighbours to increase the share of fiscal resources going to infrastructure. Yet, according to the African Development Bank (AfDB), the nation’s core stock of infrastructure is estimated at only 20-25 per cent of GDP, compared with 70 per cent for other middle income countries of its size, leaving a gaping infrastructure deficit of $300 billion.
“The Summit has already provided a vital platform for pension regulators and operators in Africa to brace up to this challenge and discuss other ways in which pension funds can positively contribute to the socio-economic growth of the continent, whilst also ensuring that retirement benefits are paid as and when due.”
She noted that infrastructure development undoubtedly remains a key enabler of sustainable development in Africa and the current rapid increase in the size of pension funds available in the continent provides a rare opportunity for multi-sectoral collaboration in bridging Africa’s infrastructure deficit.
She said: “By focusing on the long-term sustainability of pension systems in Africa, this summit shall, inter alia, facilitate the setting out of economic pre-conditions and initiatives that are needed for longer-term growth as well as to foster poverty eradication.
“Africa has experienced a reasonably rapid growth of over five per cent since the turn of the century. But this followed what could be described as a “lost quarter century” during which per capita income in the year 2000 was still below its level 25 years earlier. Along with the economic meltdown of the former Soviet Union and Eastern Europe in the transition to market economy, this perhaps ranks among the biggest economic disasters in history since the records of national accounts began.
“While contemporary discourse has focused on the lessons of success centering on the experiences of South-East Asia, relatively little attention has been paid to insights to be gleaned from the analysis of economic failures and successes in Africa. We will, hopefully, in the course of this summit, focus on why Africa had to go through such a prolonged period of economic decline during its lost quarter century.
“What are the lessons for policy formulation, especially for sustaining and accelerating Africa’s economic renaissance? In answering these questions the vast majority of political economists have focused on institutional issues, especially governance.”
• Anohu-Amazu
Anoju-Amazu pointed out that Nigeria’s pension reform’s trajectory for example, highlights the limitations of ad hoc and over generalised institutional explanations that confuse cause and effect as well as ends and means.
She said it is obvious that where States have failed or are at war there is little that economics has to offer as solutions.
She stressed that a key feature of the CPS is the institutionalisation of risk-based regulation as a means of engendering the long-term sustainability of the pension industry.
“Sustainability on this score encapsulates the troika of social, environmental, and economic dimensions of development. Regulatory strategies would thus encompass a painstaking consideration of risks as well as the rewards that lie behind endogenous opportunities. The impact of poor corporate governance practices on shareholder value, exacerbated by the recent global financial crisis, for instance, has raised issues such as transparency, risk management and business ethics, amongst others, to the front burner of the regulatory agenda.
“Then again, issues of unemployment, diseases, poverty, climate change, and inequality are also pressing needs for Regulators to consider in mapping their regulatory landscape. This novel approach to regulatory oversight – Sustainable Regulation – is one that overtly acknowledges the importance to institutional regulators of environmental, social and governance (ESG) factors and the long-term stability of financial markets, especially the Pension Industry.
“It recognises that creation of long-lasting return on pension assets is essentially dependent on transparent, predictable and well governed environmental and economic systems; systems that are underpinned by clearly defined prudential regulatory guidelines,” she added.
She said the fact that pension fund managers all over the globe are changing mandates to reflect considerations of sustainable investment and consequently the growth of ESG mandates in overall investment strategy is on the rise.
She said nonetheless, many regulators still require further education on how they should quantify performance and assess the extent to which ESG mandates are delivered upon.
Sustainable regulation precepts thus constrain stakeholders in pension fund administration to critically assess the full spectrum of investment and regulatory risks, opportunities and challenges, so as to adequately allocate capital in a mode that is aligned with the short, medium and long term interests of their clients, beneficiaries and the larger society, she said.
Managing Director, Premium Pension Limited, Wilson Ideva said the summit will not be just about talking but how Nigeria can grow from where it is presently. He said the summit is a measure of growth within the industry and the measure of the next level which is the harmonizing of best practices across the African continent.
“This measure of growth also means that you don’t have to worry about your pension when you retire. You are sure of what you are going to get at retirement.”
The non-compliance by some sate governments to establish the Contributory Pension Scheme (CPS) as stipulated in the Pension Reform Act, 2014 is a sign of regulatory weakness by the National Pension Commission (PenCom), an Actuarial Scientist and Chartered Insurer, Dr. Pius Apere, has said.
In a paper titled: “Key challenges of Nigerian pension industry and possible solutions – From an actuarial perspective”, he said there was the need by the Commission to be strict with the state governments.
According to him, the actuarial valuations of the Pay-As-You-Go (PAYG) defined benefit (DB) Schemes required by PENCOM at the point of implementation of the new CPS have not been carried out even for those state governments that have already established their CPS.
He highlighted them as delayed or non-payment of pension entitlements and misappropriation of existing pension funds, low standard of living or high poverty incidence among pensioners due to pension increases not in line with salary inflation or no pension increase at all and too frequent verification of pensioners by Pension Transitional Arrangements Directorate (PTAD) (Section 42 of PRA 2014) leading to pensioners dying during verifications.
Proffering possible solutions, the actuarist said the the establishment of PTAD and various penalties for pension funds mismanagement introduced by PRA 2014 would address some of the lingering challenges of pensioners in the public service pension administration in the country.
He said: “There is need to create pensioners’ biometric database that is suitable for future actuarial valuation, demographic and financial projections, which would also eliminate ghost pensioners. There is also the need to adopt a pragmatic approach to pensioners’ biometric verification process through a system of self-verification by pensioners capable of automatically updating the pensioners’ database having conducted an initial face-to-face verification in order to minimise the frequency of subsequent face-to-face verification exercise.
“PenCom should put in place an automation of pension and gratuity calculation and payment system to ensure that pension increases are implemented on a timely basis relative to increase in workers’ salaries and also allowing pensioners to receive their benefits as at when due. The Integrated Personnel and Payroll Information System (IPPIS) for the Federal public service should be emulated at the State and local Government levels,
“A periodic actuarial valuation of the old DB pension scheme as required by law needs to be carried out in order to ascertain the value of the pensioners’ liabilities at a given date as the scheme runs off. This will enable a realistic annual pension budget estimate to be made for the government(s) which will reduce the insufficient funds being allocated for pension payment. This would help in the administration of PTAD in minimising the delays and arrears in pension payment.”
He added that PTAD should also set up a realistic pension stabilisation fund (to be invested) with the primary aim to stabilise the pension/gratuity payment system which is always in arrears. This will ensure that money is readily available to pay the arrears of pension liability.
PenCom said 21 states have enacted laws on the CPS, while 14 were at various stages of adopting the scheme.
The Commission said one state is, however, yet to commence any action towards implementing the CPS.
There are compelling reasons to be worried about retirement preparedness. Only a minority of individuals give any thought to retirement, even when people are only 10 to 15 years away from it. Planning can make the difference between security versus fragility in retirement. Research shows that those who plan end up with double or triple the wealth of those who do not.
Other factors complicate retirement preparedness. The responsibility for accumulating retirement wealth increasingly falls on employees’ shoulders. And since people are living longer, their retirement accumulations must now stretch over lengthier retirements.
Financial literacy is the critical tool. Indeed, financial literacy is strongly linked to both effective retirement planning and also to the amount of wealth accumulated for retirement. Among the ways in which financial illiteracy undermines retirement security, research has identified three critical areas: saving, investing, and drawing down wealth in retirement.
Saving for retirement is a notoriously complicated decision. A lot of information—and a great deal of calculation—goes into determining how much one should save. Complexities aside, the main principle at work is interest compounding. Indeed, a basic understanding of interest compounding points to the importance of saving early and often, to tap the advantage of time in building a retirement nest egg. And someone who understands this basic concept will recognise that current auto-enrollment rates for retirement accounts (for workers with pensions) are too low to provide a secure path for retirement.
To save effectively for retirement, retirement saving must be set to grow. A good rate of return is essential to building a nest egg. A difference of 100 basis points (for example, a return of seven percent versus six percent) makes a huge difference over a long horizon. Again, there is a benefit from starting saving early. The sooner one starts to save, the more time the interest earned on that saving can feed retirement wealth.
There are many ways to achieve strong rates of return. Investment in riskier assets, such as stocks and mutual funds, is one avenue. While risky assets are, of course, no guarantee of high return, financial markets usually provide a reward for risk, and many retirement accounts offer investment options with these assets.
The academic literature also underscores the importance of index versus actively managed mutual funds, since high fees can quickly erode the returns on managed investments. Moreover, employer matches can greatly increase the return on retirement savings, often above those one could attain on one’s own in financial markets. This is why it is so important to take advantage of them.
Earning high investment returns on assets is only part of the balance sheet, however. To grow wealth, one must also manage debt so that it does not jeopardise retirement wealth. We all need financial knowledge to invest and borrow wisely. Our recent study on a large employer’s pension plan participants showed that employees with higher financial literacy achieved higher investment returns on their portfolios. In another analysis, I found that people with higher financial knowledge were also least likely to borrow at high cost.
Workers have been urged to report employers who fail to remit their pension contributions.
Chairman, Pension Fund Operators Association of Nigeria (PenOp), Misbau Yola, made the call during the PenOp/PenCom Consultative Forum in Abuja.
He said it is the duty of employees to complain to their Pension Fund Administrator (PFA) and the National pension commission (PenCom).
He advised employees not to be afraid, adding that they could report anonymously to avoid reprisal by their employers.
He said: “If you find out your employer is deducting money from your salary for pension and not remitting same, it is your responsibility to complain to your PFA to see how they can recover the money or report to PenCom. There is a complain channel at PenCom.
“Employees must rise up because the law backs them. They must find a means to get their employers remit their pensions. The employee must come together and put pressure on the employer to pay. When your self-help fails, then you can approach PenCom. PenCom has the power of prosecution. You don’t have to be afraid but if you are afraid, you can write anonymously to PenCom.’’
He continued: “While the PFAs don’t have the powers to enforce complaints, PenCom has the powers of enforcement. They have an enforcement departments. In some instances, PenCom has engaged recovery agents to recover the pensions. Unlike FIRS that can seal premises, PenCom don’t have that power but they can prosecute. PenCom partners with federal parastatal such that now, if you want to do a job with them, you will show a certificate of compliance. Some major organisations like Mobil and Shell have also introduced similar conditions.”
Yola, however, noted that the fact that PenCom cannot seal off premises of erring employers may also be slowing them in recovering unremitted pension deductions of employees.
He pointed out that employees who complained were vague as they did not provide specific details.
“We really need to speak up. If people are afraid of speaking up because they are afraid to get their rights, how would others get it for them?” he asked.
A total of 96,002 RSA holders who retired before the age of 50 and had stayed for at least four months after retirement without securing employment sought for 25 per cent of their RSA balances from their various Pension Fund Administrators (PFAs) in the third quarter of last year.
The Nation learnt that the RSA holders, who are contributors under the Contributory Pension Scheme (CPS), have duly been paid N20.72 billion.
This was contained in a report obtained by The Nation from the National Pension Commission (PenCom).
Out of this number, 91,355 representing 95.16 per cent were from the private sector and 4,647 representing 4.84 per cent from the public sector.
Meanwhile, the total number of retirees under the Scheme and on Programmed Withdrawal (PW) has increased by 3,340 from 103,081 as at the end of the fourth quarter of 2014 to close at 106,421 as at the end of the first quarter of the year. This represents an increase of 3.24 per cent.
A sectoral breakdown of the total number of retirees shows that while the public sector accounted for 1,322 retirees representing 38.43 percent, the private sector accounted for 2,118 retirees representing 61.57 percent in the first quarter of 2015.
The report notes that the public sector refers to both Federal and state governments.
It also showed that the monthly lump-sum withdrawals on Programmed Withdrawal in the first quarter of 2015 was N2.55 billion, which cumulatively amounted to N257.43 billion from inception to the end of the period under review.
The report further showed that retirement by Life Annuity (LA) also increased.
It said the Commission received a total of 1,914 applications for retirement under the LA Plan in the quarter.
It said: “All the requests were approved, which brought the total number of retirees on LA to 15,976.
“In addition, a total premium of N79.18 billion was approved for payment to insurance companies on behalf of the 15,976 retirees in return for monthly payments amounting to N790.10 million.
“A comparative analysis of retirees on LA and PW shows that while 13.05 per cent of the retirees were under annuity, 86.95 per cent were under PW. Thus, while retirees under the LA, accounted for 9.20 per cent of cumulative lump sum withdrawal, those of PW accounted for the remaining balance of 91.80 per cent.”
During the quarter under review, approvals were given for the payment of N4.44 billion as death benefits to the Next of Kins (NoKs) of 1,450 deceased employees.
The report showed that N77.18 billion had been paid to the NoKs of 27,321 deceased employees from inception to the end of the first quarter of the year.
Twenty-three state governments out of the 36 states in the country including Bayelsa, Bauchi, Benue, Borno, Ekiti, Ondo, Oyo, and Edo states are yet to begin the remittance of pension contributions into the Retirement Savings Account (RSAs) of their employees as at the end of the first quarter of this year, The Nation has learnt.
They are also yet to start funding of their Retirement Benefit Bond Redemption Fund Accounts (RBBRF) and yet to provide Group Life Insurance for their employees as required under the Contributory Pension Scheme (CPS) in the Pension Reform Law, 2014.
This means that employees of these states may not get their pension benefits as and when due after retirement and are not insured.
Other states that have not remitted contributions, funded RBBRF nor provide Group Life for their employees are Cross River, Ebonyi, Gombe, Kebbi, Kwara, Nassarawa, Plateau, Sokoto, Taraba and Yobe.
This was contained in the National Pension Commission (PenCom) First Quarter Report on ‘Level of Compliance with the CPS by State Governments’.
According to the report, only Lagos, Osun, Niger and Rivers are fully compliant with the law as they have remitted pension contribution, funded their RBBRF and insured their employees.
Balance in RBBRF account of state governments as at January this year shows that Lagos State had remitted N10 billion, while Ogun, Niger and Rivers had remitted N1.43billion N9.10billion and N3.10 billion respectively into their RBBRF as at the end of the quarter under review.
The report further showed that while six state governments have begun the funding of their RBBRF into RSAs account, only eight out of the 36 states had commenced remittance of contributions into the RSAs of their employees as at the period under review.
The report noted that 26 state governments have enacted laws on the CPS, while the remaining 10 were yet to pass their bills into law.
Imo State is yet to begin remittance of pension contributions too however, Imo State University is currently implementing the CPS under the auspices of the PRA 2014. The state is yet to fund the RBBRF and yet to provide Group Life Insurance for its employees.
Jigawa State has however transferred pension assets to six PFAs for management while Kano State is yet to transfer its pension assets.
The report however clarified that Jigawa and Kano states did not implement Group Life Insurance Scheme because they are currently implementing the Contributory Defined Benefits Scheme, which does not require the institution of Group Life policies for employees.
Section 4 of the PRA 2014 states that every employee to whom the act applies shall maintain an RSA in his name with any PFA of his choice.
The employer shall deduct at source the monthly contribution of the employee and not later than seven working days from the day the employee is paid his salary, remit an amount comprising the employee’s and employer’s contributions to the Pension Fund Custodian (PFC) specified by the PFA of the employee.
The PRA states further that any employer that fails to deduct or remit the contributions within the time stipulated shall in addition to making the remittance already due, be liable to a penalty to be stipulated by the Commission.
The penalty shall not be less than two per cent of the total contribution that remains unpaid for each month or part of each month the default continues and the amount of the penalty shall be recoverable as a debt owed to the employee’s retirement savings account as the case may be.
Tens of thousands of pensioners could be forced to fill in tax returns for the first time or face fines under the government’s “savings revolution”, leading accountants and savings experts have warned.
They said from April next year people may be required to declare when the interest they earn from their savings exceeds £1,000 for a basic rate taxpayer or £500 for a higher rate taxpayer.
Pensioners with even modest savings could unwittingly be cut out and face fines and even prosecution by HMRC if they fail to act and declare the income, they suggested.
Patricia Mock, a tax director at Deloitte, said: “This could particularly hit pensioners, people who are basic rate taxpayers who in the past far haven’t needed to file a tax return. There is going to be a massive communications exercise, it will be very difficult.”
HMRC denied the claims and said that there is “no question whatsoever of savers having to complete tax returns”. It said it is looking at a “range of options” to make it easier for savers to report income but that this “definitely won’t include filling in tax returns”.
In his Budget earlier this year, George Osborne announced plans to ensure that 95 per cent of savers equivalent to 17 million people – will no longer have to pay tax on their savings.
Under the new Personal Savings Allowance, higher-rate taxpayers will be able to earn up to £500 from bank accounts tax-free. Basic-rate taxpayers will no longer pay tax on the first £1,000 they earn from bank accounts.
Employees in the country need to plan their retirement to avoid disaster for the retirees and the society, Managing Director, Premium Pension Limited, Wilson Ideva has said.
Speaking with reporters in Lagos, he said there is need for in-depth planning, mental and psychological conditioning of the retiring worker to equip him to seamlessly adjust to a different kind of life after decades of service to society.
He said: “The consequences of lack of understanding of the basic requirements for a happy life in retirement and associated ill-preparedness for disaster both for the retiree and the society and consequently give the Contributory Pension Scheme (CPS) a bad name and erode the initial gains.
“The onus falls on the Bureaux of Pensions and the pension operators to run preparatory programmes for workers, especially those on the verge of retirement.”
He said economically, socially and psychologically, stable retirees are the most effective advertisement for the CPS.
He called for synergy of all stakeholders in the Contributory Pension Scheme (CPS) to ensure that the gains of the industry in the past decade are sustained.
“Partnership of relevant government institutions, especially the Bureaux of Pension and the pension operators in the country is the sine qua non for sustaining the current gains of the scheme and even expanding its scope and proliferating its inherent opportunities “There is also the need to prioritise awareness creation along with the importance and workings of the CPS,” he said.
To ensure that many more workers are covered by the pension scheme, Ideva advised that government should to plan to expand and or redefine its programmes even as it relates to requirements of participants, beneficiaries and key actors as the case may be.
He noted that expanding the CPS to the informal sector of the economy as permitted by the Pension Reform Act 2014 requires some measure of creativity and professionalism on the part of key actors to make it work.
