Fajemisin lists benefits of proposed micro-pension scheme

The Chief Executive, Stanbic IBTC Pension Managers Limited, Eric Fajemisin, said the proposed micro pension scheme has the capacity to deepen asset accumulation in Nigeria, and also provide the vital capital required for investment in critical sectors of the economy.

Fajemisin, who spoke during an interactive session with the media in Lagos, also said the scheme is an initiative designed to cover over 70 per cent of workers in the informal sector, adding that micro pension offers enormous benefits to the society, even though there are also some challenges.

He said, the micro pension scheme, when finalised, would ensure improved standard of living for the elderly, guarantee the safety of funds and may provide access to other incentives, such as mortgage facilities and health insurance.

He listed other likely benefits to include “flexible contribution remittances, the opportunity to make withdrawal prior to retirement and the enhancement of financial inclusion and attainment of economic stability objectives.”

He however added that the initiative faced such challenges as insufficient awareness and negative perception towards pensions, modest financial literacy in the country, high cost of carrying out awareness of the CPS, lack of reliable data on the informal sector and low buy-in by unions in the sector, among others.

These challenges, he noted, are expected to be addressed prior to the commencement of the scheme and thereafter.

On the 2014 Pension Reform Act and Contributory Pension Fund (CPS), he noted that the introduction of more stringent penalties against erring firms, especially as it relates to the mismanagement of the fund, has engendered greater corporate governance, making it almost impossible to misapply pension funds by anyone.

Also, the Executive Director, Operations, Stanbic IBTC Pension, Steve Elusope, disclosed that since the Pension Fund Administrator (PFA) commenced operations in 2006, the firm had paid over N204 billion to retirees, paying approximately N2.6 billion to over 42,000 retirees monthly.