‘Contributory Pension Scheme needs massive public awareness
THE managing director of Premium Pension Limited, Wilson Ideva, has stated in unequivocal terms that the under subscription to the Contributory Pension Scheme (CPS) is as a result of lack of adequate public awareness. “A vast majority of Nigerians including the supposedly enlightened community lack information on the workings and belief in the workability of the contributory Pension Scheme” said Mr. Ideva recently at the company’s corporate headquarters in Abuja while addressing journalists. “How else can one explain the less than 10% penetration of the market more than ten years after the commencement of the scheme?”
Less than seven million workers in Nigeria have subscribed to the new pension scheme out of the estimated more that seventy million working population while a total of 4.9 trillion Naira has been amassed as pension Assets under Management in the industry. “The lukewarm attitude of some Nigerians to the new pension scheme is inexplicable considering the ugly past of the defined benefit scheme which we have all been striving to break away from” he continued. “Workers looked up to retirement with so much fear and trepidation because of the inherent uncertainties. The old scheme was fraught with corruption and bureaucratic bottlenecks that occasioned the ugly sight of long queues of aged citizens waiting to be paid pension that oftentimes never came.”
Huge success and the most impactful government initiative in recent times. “The scheme has already begun to improve the lives of retirees in the country” he said recently at the corporate headquarters of the company in Abuja. “It is also inching towards becoming a critical contributor to national development.”
Mr. Ideva said that there was need to applaud the initiators of the scheme in the country. “Initially, when the idea was presented, a lot of people did not believe in it” he noted. “This is understandable considering where we were coming from.” He noted that such skepticism has been dissipated with the successes recorded by the new pension scheme since its more than ten years of existence. He recalled the pathetic situation of pensioners before the scheme was introduced and juxtaposed it with the current situation where workers are partners in the management of their pension funds. He urged people to note the difference between the new Contributory Pension Scheme and the old defined benefit system under which some pensioners are still being managed.
He noted that under the new scheme entitlements are being paid regularly. “All you need to do is notify your Pension Fund Administrator (PFA) six months before your retirement and submit all the necessary documents.” He said. “Once this is done, within one or two months upon retirement you will be paid your lump sum which has replaced the gratuity and thereafter you begin to enjoy continuous programmed withdrawal.”
Mr. Ideva also pointed out that while the old scheme which operated before 2004 left a huge pension deficit within the economy said to be in the neighborhood of two trillion naira, the new scheme has accumulated pension asset of over 4.7 trillion naira and an enrolment of over 6.5 million people. “So when you put this together you will see that it has been a success story and this pool of funds is already playing a critical role in national development” he averred.