PFAs Pay N1.63 Trillion To 442,000 Retires As Lump Sum in 15 Years
The Pension Fund Operators Association of Nigeria (PenOp) paid a total of N1.63 trillion as a lump sum to 442,000 retirees on annuity and programmed withdrawal in the last 15 years.
The Chief Executive Officer of PenOp, Oguche Agudah, disclosed this at a media parley with members of the Nigerian Association Of Insurance and Pension Editors (NAIPE) in Lagos yesterday.
Oguche who was speaking on the theme of the parley – “At the dawn of 20 years pension reforms, what are the gains?” said the Nigerian pension industry has recorded significant growth and contributes significantly to the nation’s economy.
He said the industry was highly regulated and protected, leading to transparency in the scheme, adding that the scheme has 19 PFA’s, six closed PFA’s and three Custodians.
Oguche, in his presentation, said the industry since inception paid a total of N665.23 billion to 111.708 applicants as a lump sum on life annuity as of the second quarter of 2023, while retirees under Programmed Withdrawal, a lump sum paid on programmed withdrawal stood at N964,239.47 billion in Q2, 2023.
On withdrawal of 25 percent from RSA balance on loss of job, he said the industry paid N208.86 billion to 475,000 Nigerians who lost their jobs from inception of the scheme to Q2 2023, while approval of death benefits payment rose to N356.32 billion paid to 91,214 beneficiaries of deceased employees since inception of the scheme.
Earlier in his Goodwill message, the representative of the Director-General, National Pension Commission (PenCom), Mrs. Aisha Dahir-Umar, Head of the Surveillance Department at PenCom, Mr. Ehimeme Ohioma, listed adequate returns on investment, good service delivery, capacity and skilled workers as critical to the growth and survival of the industry.
Returns on investment Ehimeme stated, must be above inflation, noting that if the returns are not above inflation, there will be a problem. “How do we make the pension funds to earn a real return on investment.?”
“There will always be problems but how well and soon the issues are addressed is critical to the success of the industry. There will always be complaints from the contributors but it lies with the regulator and operators to ensure the complaints are promptly treated.
“Service delivery is key and to ensure that the industry has efficient and effective service delivery the commission in 2022 increased the minimum regulatory capital for Pension Fund Administrators. This is to ensure they have enough capital to be able to have critical infrastructure as well as to be able to run their business efficiently well, be able to serve the public, have good staff and conducive offices.”
“Capacity is a continuous thing because the world is very dynamic. The skills of the industry practitioners both the operators as well as the commission need to be constantly upgraded to meet the acceptable standard.”
Highlighting some of the achievements of the industry since inception, he said the industry asset under management grew from zero to N17.65 trillion as of October 2023 with an annual growth rate of 20.32 percent “.
Earlier in his opening remarks, the Head, Media/Publicity Committee, Penop, Lanre Idris, said the industry has made steady and significant progress.
Idris noted that gone were the days when pensions were only being enjoyed by civil servants, stating that today, pension is for all Nigerian workers.
He said that the collective efforts of the stakeholders had changed the face of the pension industry through reforms and the evolution of ideas.
Lanre Idris, who is also the Managing Director/CEO, Leadway Pensure, said before the promulgation of the 2004 Pension Act, there was no confidence in Pension because retirees were dying in Abuja while waiting to get their pensions.
“Then pension was laughable but today, we are proud on the performance of the pension sector. Today over 10 million subscribers to the Contributory Pension Scheme (CPS) are guaranteed of their pension at retirement. The Pension Ecosystem is working.
Idris said the introduction of CPS has brought inherent transparency to the nation’s pension sector, adding that the N17.65 trillion Pension Assets Under Management which belongs to the over 10 million subscribers is already invested.
While emphasizing the need for more awareness about the industry and its contribution to the nation’s economy, he appealed to NAIPE members to help tell the industry’s stories that presently the retirees’ assets are being managed by private organizations.
