The Nation Newspaper

Tag: system

  • ‘Consumer connection system vital for media planning’

    The belief that advertising investment is a waste may wane soon, following the launch of Consumer Connection System (CCS), a Dentsu Aegis Network consumer, lifestyle and product survey last week.

    Coming at a time assumptions have replaced research in making marketing decision, the new tool avails  industry players, such as advertisers and agencies handling their brands, the opportunity to calculate the impact of advertising campaigns and how consumers make decisions.

    CCS marks a step-change in the way consumer research is conducted within the consumer landscape.  It allows brands to find out crucial information about their consumers.

    The smart tool addresses the media reach dimension of consumer behaviour and covers the reaction to this reach through an investigation into their notice and engagement experiences with various types of ads, ad formats and categories. It measures the use, influence and effect of over 50 communication channels.

    At its launch, the Director, Insights and Innovation at Dentsu Aegis Network sub-Saharan Africa, Byron John, said: “CCS Planner in Nigeria is now the most sophisticated media communications planning tool in Nigeria, but it has inherently future. The CCS Planner has the ability to calibrate, not only the CCS Benchmark data but any other third party media data.”

    Its Group Managing Director Mr. Emeka Okeke, said: “CCS and associated tools derivable from it is an absolute game changer in communication planning in Nigeria.

    “Advertisers, the media and communication experts desire and deserve the level of details that CCS provides to follow and track the sophisticated consumer who with modern technology receive millions of messages everyday and therefore have become very discerning in their choices of products and services.

    “They no longer rely solely on raw messages from main stream media to make up their minds about brands. They live in a connected world through multiple sophisticated devices and we, therefore, need systems like CCS to track changes in their lives and behavior. It is unequivocally another first by Media Fuse Dentsu Aegis Network in Nigeria and counting.”

    Dentsu Aegis Network in sub-Saharan Africa Chief Executive Officer, Dawn Rowlands, noted that CCS is the most comprehensive source study in the media planning and buying market.

    “Apart from having an extremely granular level of touch-point data, it studies the interaction consumers have with media in detail. With increasing ad-avoidance, media engagement, incidence of cross-screen consumption, etc. are far more important metrics than reach and time spent. CCS will give MFDAN the insight into the market that no other tool is able to offer,” Rowlands added.

  • ‘Establish talent-based system’

    Governments have been called upon to establish a system that would discover more talents for the nation’s education.

    Chairman, Abbeycome Nursery/Primary School, Ojodu, Lagos, Mr. Michael Olumide Osifoluke, told The Nation that to fix the education sector and improve standard, there must be concerted efforts to evolve a system that would harness latent talents of the citizenry.

    To Osifoluke, the physical and intellectual deposits are there, but may not be consolidated upon “unless there is a deliberate platform on which to harmonise those potentials; that is what Nigeria needs.”

    Speaking during the school’s graduation titled: ‘Class of outstanding stars, 2016,’ Osifoluke, a certified public accountant, expressed optimism that given the right atmosphere, Nigeria can attain greatness again.

    He said: “The late sage, Chief Obafemi Awolowo, was noted for his free education policy. It was an actionable policy that produced many raw talents. Till date, the system is still producing raw talents as far as the Southwest is concerned. So, those are the kinds of springboard on which a national policy on education can be hinged. It has been done before and it can be done again.”

    Osifoluke described government’s banning of Post-UTME policy as flawed.

    He insisted that post-UTME screening should continue since that is the global best practice, adding that tertiary institutions the world over, have different ways of screening their candidates in order to have the very best in their systems.

    Proprietress/CEO of the school, Mrs Abiodun Osifoluke, said education  remains the only tool that can mould a man’s future irrespective of his or her social or financial background.

    “It has been proven right from the ages that the civilisation we lead today started from the ancient Egypt. Even the discovery of the world is hinged on knowledge and education; there is no alternative to education. It was knowledge that was being sold and spread all over the world. Without education, one cannot be a better individual.

    “It is that potential we should seriously address and harvest; not just by saying it, but by evolving a cohesive system that would discover the many potentials that cut across Nigeria. There are evidences ,as most of our candidates go all over the world and receive awards,” she added.

  • Fed Govt saves N185b from new payroll system

    The Federal Government has saved over N185 billion from the implementation of the Integrated Payroll and Personnel Information System (IPPIS),  Bureau of Public Service Reforms, Director-General Dr Joe Abah has said.

    He said remarkable reforms had taken place in the civil service, including the removal of 65,000 ghost workers from IPPIS.

    Abah spoke on Tuesday while presenting the “Status Report of Reforms” at a five-day Specialised Reforms/SERVICOM Training Programme in Abuja.

    “We started off with a completely inaccurate and unreliable payroll system. Since we put IPPIS in place in 2007, government has saved in the region of N185 billion and weeded out  65,000 ghost workers,” he said.

    He said the Work Efficiently Unit saw the identification of another 23,000 who were collecting multiple salaries.

    “IPPIS has been a great success, but it has some challenges and it has some weakness. One of the weaknesses is that as soon as the Bureau of Public Enterprises (BPE) put in place IPPIS after piloting it for a couple of years, it was basically taken over by accountants and they started with payroll instead of with the Head of Civil Service Commission (HCSC).”

    Abah said it was possible to get on the payroll without being known by the Federal Civil Service Commission and that was why the Bureau still had issues with IPPIS. He, however, said the Bureau was working on that. “We are hoping that complete HCSC switch will come on board in July,’’ he said.

    He said the Bureau was also working with the Efficient Unit to ensure that the salaries were linked with the Bank Verification Numbers (BVN).

    Abah said civil servants shouldn’t allow people to accuse them of not doing well, saying that some of the reforms were working in spite of challenges. He said one of the reforms that had also worked in the civil service was the Contributory Pension Scheme.

    “Before 2004, if you retire; you will be entitled to a pension whether you actually get it, it is another matter because at 2004, we had Pension deficit of N43 billion. So, the real chance is that you could retire but wait for 10 years and you will actually not see the Contributory Pension Scheme; our pension pot is now credit of N4.8 trillion as at 2015,” he said.

    The DG, however, said there are still challenges as Nigeria is still not managing her Pension Funds Administrators (PFA) very well. According to him, “there is still a big gap between when you retire and actually when you start to get a pension sometimes a gap of about nine months – that is a gap we still need to deal with’.’

    Abah further said in terms of procurement, government was losing $10b annually as result of fraudulent procurement practices. He said of every one Naira one spends, 60 Kobo goes into fraud.

    According to him, since putting in place the Procurement Act in 2007, government has saved more than N650b.

    He, however, said there were issues with what was provided in terms of budget and what was released, which made procurement planning a little difficult.

    “You don’t know when the release of fund will come; you don’t know whether is coming in full or not, it is difficult to plan your procurement properly. There is still challenge with contract splitting that we need to deal with in procurement,’’ Abah said.

  • Expert seeks functional agric research system

    An expert on economic development, Dr. Utiang Ugbe, has said eradication of hunger will require a functonal  agricultural research coordination system.

    Calling  for a unified bureau, Ugbe  stressed that making researches work for improved food security and nutrition requires coordination and implementation of appropriate policy interventions and getting researchers to work together to achieve given  objectives.

    He said: “There should be a unified bureau for the governance, coordination, management, and direction agricultural science, technology and innovations (STI) for the country.  The functions of the bureau will include hosting of partner-funded pilot projects on various aspects of agriculture, by aligning each project with the suited agricultural research campus, and the relevant private sector parties. This is how you ensure institutional learning and the effective digestion and diffusion of innovations from pilot projects into national priorities, policies and processes in agriculture.  The Agricultural Research Council of Nigeria (ARCN) hosted a small DFID (Department for International Development)-funded pilot project for about 30 months, and was able to adapt key elements of the technical template of the project into a major World Bank funded project which rolled out nationwide.”

    Currently, he said the ARCN has coordination and oversight functions of the national agricultural research system consisting of 15 or so national agricultural research institutes, and federal colleges of agriculture nationwide.

    He noted: “Each of the research institutes was created by an enabling law at a given point in time, and each has its own governing board. The current system does not appear to have a mechanism that would allow effective technical oversight and quality assurance in the development of market-oriented science, technology and innovation (STI) research by the agricultural research institutes. As a result, we now have a non-existent interface between agricultural STI and the private sector in the country.

    “But if you look at the structure in some countries, especially Brazil, India and Ghana, our system is not streamlined, and therefore does not have a workable technical quality assurance and oversight mechanisms. The boards of the research institutes are typically political appointees who are there just for the largesse, and not because they know a thing about agricultural research, science and technology. Rarely do you hear that a governing board of a national agricultural research institute has ever successfully fundraised from the private sector or from development donors for the institute, apart from occasional project support coming through the Federal Ministry of Agriculture. Yet, the key function of a board in the business world is to serve as resource to the organisation, not unproductive cost centres that politically appointed boards typically have been.”

    He said the recommended system will have only a single governance structure or board for agricultural research in Nigeria, adding that since Nigeria is a federal political structure, any state may also establish its own agricultural research institute, just as we now have some state colleges of agriculture.

  • Re: Our endangered value system

    SIR: Professor Olatunji Dare’s article “Our endangered value system”, (The Nation, March 29), was very instructive. Next to the agitation for a new constitution that reflects a true federal structure, the other matter for which I have continued to be vocal is our fast changing values. It is about time this matter is brought to the front burner.

    How did we come to this pass? A situation where nothing matters except crass materialism. Among the Yoruba, there is what we call omoluabi which I often like to define as ‘all that is good in a human being’. It is the quintessential human being. When we say in Yorubaland that a person is an omoluabi, it literally means that he/she is a person of integrity, a trustworthy person, a selfless person, a charitable person, a respectful and respectable person, a philanthropist, a humanitarian, a just person, a lovable person etc. To be an omoluabi, was the pride of a Yoruba person, but this value that is all good and used to be desired and aspired to by us all is fading and fading fast.

    In order to attain the change we want at a fast but more realistic pace, we need to change our attitude. This is one of the first things the Buhari administration should have embarked on. It is that fundamental. The foundation of the building block on which all other changes are premised is an attitudinal change. When we cultivate the right values, then all other things will follow. However, what we have done so far, and the reason the change is seemingly slow is that we have put the cart before the horse. As soon as the government was sworn in in May 2015, there should have been a pronouncement on the establishment of a national reorientation programme which would set the tone for the change we need and the goal we aspire. The advocacy would build up a groundswell against our current unethical values.

    A programme reminiscent of his first coming in 1983- the ‘War Against Indiscipline’ (WAI), but this time more elaborate would have worked wonders as it did at that time. By now, many of the criticism being levelled against his government would have been properly taken care of. What we have now leaves much to be desired. It is like a one man riot squad rather than a situation where we are all involved.

    An examination of the classification of society into two models by Robert Putnam, namely ‘Civic Community’ and ‘Predatory Society’, shows clearly that Nigeria fits squarely into the description of a predatory society. In order to change Nigeria from a predatory society to a path of development as epitomized by a predominantly civic community, we must have a cultural revolution. It is obvious that Nigeria will not develop and neither can it be effectively governed in a predatory society. It is therefore imperative to educate and establish new expectations and civic norms through a concerted reorientation (attitudinal change) programme. I believe that this should be a priority of government now.

    • Tokunbo Ajasin,

    Akure,  Ondo State

  • ‘In a federal system, it’s an aberration not to have state police’

    ‘In a federal system, it’s an aberration not to have state police’

    Abdurrazaq Balogun is the Executive Secretary/Chief Executive Officer (CEO) of the Lagos State Security Trust Fund. He was the Chief Whip of the Lagos State House of Assembly and thus a member of the leadership of the Assembly when the law setting up the trust fund was passed. Today, he sits atop the agency. In this interview with Oziegbe Okoeki, he speaks on the activities and his vision to take the fund to higher levels. 

    You were part of the State Assembly that passed the law setting up the Lagos State Trust Fund, so you must be very familiar with the provisions of that law; from your experience so far as the agency’s Executive Secretary/Chief Executive Officer, will you say the agency is meeting up with the provisions of that law?

    I will even say in my view, with what I have seen on ground, they have surpassed the expectations of the law. But again, don’t also forget that Lagos State Security Trust Fund had no precedent before its creation in Lagos State. So, the former board actually built from scratch and over the years what we met on ground in the last eight years since its creation has been one that is very fantastic. We met a board that is up and running well and it just really shows that sometimes this is exactly examples of institution being built not around people because almost all the pioneer board members have left, including the former Executive Secretary, and yet we have inherited a very fantastic infrastructure and also management.

    You never envisaged when you were passing the law that one day you would head the organisation but that has become a reality now, now that you are in charge, are there any areas in the law that you think needs improvement by way of amendments?

    Yes, there are some few things I have seen in the law and even outside the law that I feel, because what the intendment of the law is, is that it will be an interventionist sort of an agency, to bridge the gap between security agencies and Lagos State because of the years of neglect of security agencies. So this fund was created to source for resources from the private sectors and well meaning Nigerians to be able to intervene in activities of security agencies. So it encompasses everything that has to do with security in Lagos State but don’t also forget that security is in the exclusive list of the constitution so that limits the work we can aspire to do; for instance, we have spoken about the state police that has not come to fruition. But as it is right now, if you ask me what I want to do in the law, I will ask for, for instance compelling public places to have their own special security apparatus. For instance look at our shopping malls today, all our shopping malls, it is a new concept, a very brilliant concept, but I don’t think the security is adequate. I will want something whereby you can control the people entering the mall in a very controlled manner both in the entrance and exit and you can have things like scanners, body scanners, lobby scanners so that at least you know that everybody entering the mall for instance will not carry devices that are injurious to the people. But by and large, so far so good, I have looked at the law over and over again, I think it is still very much okay as it is right now but I am sure as we go on I will now continue to see ways and manners by which we can review but as it is right now, it is adequate for us at the moment.

    What would you say are the challenges so far?

    For me, I really don’t see anything as a challenge. I see it as a way to forge ahead. What I see here is that we need to be more proactive in this fund. This fund needs to be much more visible. We need to reach out to a large number of the populace. We cannot continue to depend on large donors only, because certainly we all know the economic situation of the country. Most of our big donors are banks and stuff like that and well meaning Nigerians. But now we want to be out there, to let Nigerians and Lagosians know that security is the concern of everyone and that every token, every naira you donate goes a long way. So instead of just concentrating on big donors, if for instance in Lagos State we have donors, just 1million donors that donate N1000 – that would be N1billion. That is the kind of money we have never made in this fund. And so we want to make it much more visible, we want to also be able to make Lagosians know that every money that they donate is well spent, is well accounted for; we run a very transparent and accountable organisation here. And that whatever they are giving, we are giving back to them what they expect from us by making the security agencies much more visible, much more responsive, and friendlier. And giving statistics of the crime rate in Lagos State and over the years, what we have seen is that there has been a huge decrease in crime rate, I mean vis-a-vis the cosmopolitan nature and the challenges of Lagos State.

    You talked of state police earlier, a lot of people believe that with the kind of support the state government is giving to the security agencies through this fund, that it will be able to fund and maintain a state police. What are your views on the clamour for state police and the ability of the state government to fund and maintain it?

    It is something that I know Lagos State has been clamouring for, even as a parliamentarian we have debated on this matter several times. Lagos State has always been in front of any innovation in this country. As a matter of fact, in any federal system, because we are supposed to practice federalism in Nigeria, it is an aberration that you have a state government without a state police, prisons, county prisons or local government prisons or even police. It is not really a big deal; I think Lagos State is poised to establish a state police once we are given the clearance to do so. We’ve had LASTMA over the years, which is one of the most successful stories of Lagos State; we have KAI, all these are uniformed personalities. Now, the trust fund is here and look at the resources we have generated over the years vis-a-vis what we have been able to maintain in terms of security in Lagos State. So for me, I think Lagos State is ready and I am sure if that is eventually actualised, Lagos State would be the better for it, the citizens would be a lot better.

    Does the Agency get directly involved in security issues, like for instance calling on the Agency for rescue in case of armed robbery attack anywhere? 

    No, it is not primarily our responsibility, don’t forget that no matter what we do to assist the police, we are not police officers; we are not trained to perform their functions. I think what we want to do in this administration is to have a very robust interface with the people, to have a very robust website where people can interact with us, send messages to us, issues that they may not be confident to discuss with the police; they can send us and we can forward it to this people. We also want to make the emergency numbers of 112 and 767 very, very visible, so that all Lagosians can know these numbers at their finger tips; after all you don’t need to have a kobo on your phone for you to be able to asses these emergency numbers.

    There was this talk about installing CCTV all over Lagos for security purpose some time ago, how far has it gone?

    When the governor came on board, I think security is one of his main cardinal objectives in the state. He understands that without security, people cannot go about their business with ease, and if business don’t thrive, you can’t get revenue to build Lagos. He is very, very passionate about the security of Lagos state and the CCTV project is on course. I know there are so many committees working on it. We want to have a very robust CCTV system in Lagos that would stand the test of time.

  • How chiropractics ‘clear’ the system of disorders

    How chiropractics ‘clear’ the system of disorders

    Stress affects the system negatively. But a chiropractor, Prof Magnus Atilade, tells OYEYEMI GBENGA-MUSTAPHA that chiropractic can relieve people of stress.

    A chiropractor, Prof Magnus Atilade, has said Nigerians are yet to enjoy the benefits of Chiropractics because they are not aware of its existence.

    He said when the body undergoes regular chiropractic wellness care, it will function well.

    Also, injuries and common sicknesses, he noted, tend to be less severe, adding that those who experience regular chiropractic wellness recover quickly from illnesses.

    Chiropractic is a form of alternative medicine that emphasises diagnosis, treatment and prevention of mechanical disorders of the musculoskeletal system, especially the spine, with the belief that these disorders affect general health via the nervous system.

    Atilade, Managing Director (MD), St Luke Chiropractic Clinic Ekololu Street in Surulere, Lagos Mainland, said people can tap into Chiropractic, which is based on the fact that the body is a self-regulating and self-healing organism.

    “Chiropractic is the science of lo-cating offending spinal structures; the art of reducing their impact to the nervous system, and the philosophy of all things natural. The brain, spinal cord, and all the nerves of the body control these important functions. Chiropractic techniques were invented in the 19th century by Daniel David Palmer,” he said.

    He explained that Chiropractic is the method of natural healing chosen by those seeking complementary/alternative health care for acute and chronic conditions. “While you first visit a chiropractor to relieve pain in the lower back or to treat sciatica, neck pain, whiplash or headache, you will find that a chiropractor views you as a whole person and not the sum of your parts. A chiropractor will work in partnership with you to ensure your optimal health and wellness.”

    He added that chiropractic triggers the body’s ability to heal as chiropractors recognise that many factors affect one’s health, including exercises, nutrition, sleep, environment and heredity.

    Chiropractic focuses on maintaining one’s health naturally to help your body resist disease, rather than simply treating the symptoms of disease. “This is because a chiropractor starts with a thorough evaluation of the body when one visits a doctor of Chiropractic. One will be evaluated using time-honoured methods, including consultation, case history, physical examination, laboratory analysis and X-ray examination. In addition, one will receive a careful chiropractic structural examination, with particular attention paid to the spine.”

    An inclusive benefit is that it involves no drugs or surgery. “A broad range of techniques are used to locate, analyse and gently correct vertebral misalignments (subluxations) in the spine. Chiropractors may use manual adjustment, electrical muscular stimulation, ultrasound or massage. But they never use pharmaceutical drugs or invasive surgery. Chiropractic is a natural method of healing that stimulates the body’s communication system to work more effectively to initiate, control and coordinate the various functions of the cells, organs and systems of the body,” Atilade addeed.

  • ‘How BVN is curbing fraud within the system’

    ‘How BVN is curbing fraud within the system’

    Chibueze Oguagbu is the Managing Director of an engineering startup called Automated Access Technology. In this interview with Yetunde Oladeinde, he speaks on the motivation for following his career path, challenges and prospect of running a startup. Excerpts:

    Why did you opt for engineering?

    In school, I was always a science student and initially, I wanted to study cardiology, a branch of medicine. I wanted to study that because my father died of heart failure. However, when I learnt what it took to become a cardiologist I changed my mind. I needed to first get my MBBS, travel abroad and specialise in that area, the process was just too long and I decided to study something else. Engineering was next and I also thought of pharmacy but I settled for engineering.

    I have a bachelor’s degree from Enugu State University where I graduated in the year 2000 and since that time I have been in practice. First I worked in a company where I was the Head of IT and operations which was a realisation of my dream and aspiration. I have many colleagues who are bankers; I have never worked in any sector apart from engineering, even when I was under paid. The first job that I ever had in my life was when I was a software developer for a software developing firm located in Anthony, Lagos.

    There I was a software developer but my salary was N25, 000, that was in 2006 and I had not married at that time. It was the most interesting job that I ever had. But unfortunately the money wasn’t good. My wife was earning four times my salary at that time. Even though I loved what I was doing I had to leave. I left and found myself in biometrics consulting and we did projects for Lagos civil service pensioner’s scheme.

    The biometric system there was implemented when I was the head of implementation for the consulting company. In year 2010, we handled the Oyo state biometric implementation. Interestingly, when I left software development, I found my way in biometrics and I thank God for that.  I went out for a better salary but I also discovered a better option, something that took me to the next level.

    Talking about biometrics, the banking sector made the BVN registration compulsory last year. What do you think this would bring to the economy?

    In year 2008, we implemented a project for Firstbank. It was the first ever biometric ATM in Nigeria. The reason for that was because of the high level of fraud in the banking sector. Everything boils down to identity and theft.

    Most fraud committed has to do with identity and this can be countered by things like social security number and things like biometrics. It helps you to pin point people, know each person one-on-one and so many other things.

    How can online fraud be checked?

    I would say that the Central Bank of Nigeria in conjunction with the banks are doing a lot at their own end. Prior to five years ago, Nigeria didn’t have anything in terms of data base. It is just now that we are trying to gather information about our people that is why we are doing BVN and everything.

    I remember that in 2008, Lagos state government was the first state government to embark on biometric verification for pensioners. The reason at that time was the same fraud, there were ghost pensioners everywhere. Introducing biometrics to the society from the government end would enable the society to sit up. You can trace who is who when people commit crime.

    Who are your targets?

    You know the challenges that startups are faced with in Nigeria, we want to take advantage of this. For the product and services that we cover, people need to know that there are people who can provide such products and services. For instance, the automated gates and doors are for anti-theft. You can control access to any location using our machines finger print. Since Ebola came up however, people are more interested in facial recognition. You stand in front of a terminal and you authenticate.

    Facial or fingerprint authentication applications, linked databases, interfaces to payment platforms through NIBSS, biometric enrollment and verification, field exercises, pensioners’ verification, staff audit, biometric administration systems, document capture are some of the things that we focus on.

    Apart from government who is using biometrics to check crime, manage identity better, private people can also make use of biometrics. In a showroom for instance, your staff enroll their fingerprints and anybody whose finger prints is not registered cannot have access to it. In addition, when you have an attendance record where people sign when they come in and go home, here there is usually a lot of fraud and they can record the wrong thing for you.

    We have a system that records access control, time and attendance. Those are the basic features and it is the same terminal that does the two functions. In year 2008, I travelled to South Africa and I didn’t see any maiguard anywhere. Most of the residences and industries that I went to all use automated gates.

    I realised that it was something that should be common in Nigeria because it works for other parts of the world. It took me five years to bring this dream to where it is today. We can fabricate a gate from scratch, do installation, configuration and maintenance. Our desire is to make automated gates affordable.

  • ‘Corruption hampers tax system’

    Nigeria cannot justify increasing taxation without clamping down on corruption in its tax system, President of Trade Union Congress (TUC), Bobboi Kaigama, has said.

    Speaking at a national summit in Abuja, he said companies avoided corporate income tax and privileged Nigerians avoided paying personal income tax, denying Nigeria money that could boost its revenue.

    Kaigama said the only people paying tax is the working class whose taxes are deducted at source before banks deduct transaction charges and never really see the true figure of their salaries.

    President of the Chartered Institute of Taxation of Nigeria, Mac Anthony Dike, said skewed administration of tax policies and laws had reduced burden of direct taxation but stagnated indirect tax.

    He particularly said value added tax had been bastardised because restrictions imposed by VAT were flouted. The restrictions forbid deduction of VAT on fixed assets until they are sold and insist on full consumption.

    Dike said Nigerian needs to continue to assert its tax system to ensure no one is left behind. “I will support an increase in VAT provided we remove these bottlenecks that distort the picture,” he said.

  • Experts hail Chile’s retirement system

    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.

    • Culled from Forbes