CPS has brought succour to retirees, says Ideva
Wilson Ideva is the Managing Director/CEO, Premium Pension Limited. In this interview with journalists, he speaks on the benefits of the Contributory Pension Scheme (CPS) in Nigeria when compared with the old Pay-As-You-Go arrangement, the impact of the scheme on retirees and the economy, among other issues. JOSHUA NSE was there. Excerpts
More than 10 years after the contributory pension scheme was introduced in Nigeria, how has it impacted on retirees and the economy
Before now, when you talk about pension in this country, people talk about pension with so much fear and with so much hatred and you wouldn’t blame them because of what was happening then. There were endless queues of retirees waiting to be paid their pension that was not even forthcoming because what used to happen was that under the old pension scheme which we referred to as Pay-As-You-Go.
Every year, we had what we called budget provision by the government where pension was based on the availability of funds. But there was no fund set aside, so pensioners were not being paid.
Today, you are no more seeing those queues. Is it that people are not retiring? People are retiring. The difference is that under the new scheme workers or prospective retirees have fully funded Retirement Savings Accounts. Before you retire, you already know how much is in your RSA. You can also be told what you will be getting as your monthly pension. So, it is not like when you will be waiting for governments that are going to be looking for money to pay you, the money is already there. So, the Contributory Pension Scheme has removed the queues that we used to have. We have also put smiles on the faces of our senior citizens. The difference is that when you have money you can plan for it no matter how small it is.
In terms of how the pension scheme has impacted on this country, I am sure that you are aware that we have amassed colossal sum in terms of pension assets in the industry. I think, for now, it should be in neighbourhood of N4.7 trillion; it keeps increasing every day. And if you get a breakdown of the investment portfolio, you will see that the Federal Government takes some of this money in terms of bonds and in turn use it to improve infrastructure. I am sure despite the problems of this country, there are areas of improvement, if you travel by road, you will see that some of the roads have been tarred and the railway is coming up. Because if you have about N5 trillion and about 60 to 70 percent is in government bonds, you can work it out to know how much we are putting in those areas and we are also going to start investing in infrastructure such that RSA holders can also access low cost houses and use their RSA balances as guarantee for such facilities.
That is what we have under the new investment guideline. That is where we are going to. But before now, these are areas where people didn’t seem to have seen the impact. But I can assure you these are where we are making impact; contributing to the development of the country.
We have also helped to wipe out the queues of retirees waiting to collect pension. Did you see any queue when you arrived here? But we are managing 16, 000 retirees. We have depended on technology. Once you register with us, we know your bank details and on the 19th of every month, we pay you. You don’t need to be here, you can be anywhere in Nigeria and even overseas. We do e- payment and transfer your money to your account wherever you are in the world. Once you have debit card, you can access your money and you don’t need to come to us again. In fact, people are getting paid more regularly now than when they were working. So that is the beauty of it. This is where the pension industry is contributing in financial development and also helping to ensure stability.
The life span of people is going to be improving because what leads to early death is suffering. When you retire and you are waiting for pension that will never come in a year and you are not fortunate to have siblings or children who will take care of you, it is a recipe for early death. But that we have been able to reduce significantly.
As one of the licensed Pension Fund Administrators in Nigeria, can you tell us the impact Premium Pension Limited has made in the industry
In line with the Pension Reform Act 2004, all the Pension Fund Administrators (PFAs) were licensed by National Pension Commission and Premium Pension was one of the very few that were licensed in 2004. We are in our tenth year as a Pension Fund Administrator. But I will say that in the last 10 years, we have been able to distinguish ourselves in the pack of all the PFAs and we have made tremendous impact both on our clients and on our economy; making contributions silently without announcing such.
From Retirement Savings Accounts (RSAs) that started from zero in 2004, we now have Asset Under Management (AUM) in excess of N380 billion. And we have funded RSAs of over 400,000. Of course, the registration is well over 500,000. But we have funded RSA of over 400,000.