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CEO: Nigerian workers' N4.6trillion contributory pension is safe > Adeniyi Falade > July, 2015.

Adeniyi Falade, chartered accountant and Managing Director of Crusader Sterling Pension says pension funds administrators in Nigeria will have =N=8trillion to manage by 2020. He spoke with Gorddy Oyailo.

A lot of sensitization work is being done by the operators, although they engage workers that have not registered with the pension scheme to do so. So far, only about 10 states have joined the scheme. The Pension Commission, PENCOM, on its own has engaged consultants nationwide to investigate companies that have integrated their employees in the scheme and those that have not. Findings show that only 6million out of the 30million working population in Nigeria are integrated into the scheme.

Incentives to join

The enabling law has been reviewed in 2014 to cater for workers that will like to draw on their retirement funds before they are 50 years old. Some workers need the funds as working capital for businesses; some have health challenges while others need it as collateral for mortgages. The granted access will encourage more workers to join the scheme now that these concerns, which springs from the rate of job loss by workers below the 50 years age mark. The pension product is simple and the market is vibrant. 

Deepening the market

We need every working Nigerian to join the scheme according to the law that established it. When people outside the scheme begin to realize how much they are missing from the value created for those in the scheme, they will naturally join. The whole essence is to ensure every worker plans for the future and retirement. The industry needs to create more awareness on these. The industry should ensure that funds under pension administrators are well managed to give more people confidence in the scheme.  With continuous dialogue between the operators and regulators, more product outlets will be created for investments and the returns will continue to improve. When contributors are satisfied with these and claims are paid as at when due with zero tolerance for corruption, the industry will meet and even exceed expectations.

The pension scam

The police and government organization pension scam has nothing to do with the workers contributory scheme. The scam took place under the old scheme. The scam led to the first pension reform and the coming of the new scheme.





To prevent such scams, the legislation put the administrators of pension schemes under the supervision of the Pension Commission, PENCOM, which is the industry regulator. The industry needs more marketing communication efforts so people will have confidence in the industry. It has to sensitize Nigerian workers, particularly those in the formal sectors to see the benefits in the scheme and join. The industry is young, it is just 10 years old and well regulated, so, there will be improvements with time.


The pension fund belongs to the people, the contributors to the scheme; the individual workers who will one day retire. What is important is that it should be well managed for them to live successful lives after retirement. The critical issues to me are to put the funds into investments that will ensure the principal plus interest are guaranteed, paid as at when due and ensure that the yields from such investments are good enough; competitive above inflation and in accordance with international best practices. In monetary term, the industry is worth about =N=4.6trillion at the momment. In our projection for another five years, the industry will be talking about =N= 8trillion to =N=10trillion.




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