Pension transits from defined contributions to ambition

From left: Managing Director/Chief Executive Officer Financial Derivatives Company Limited, Bismarck Rewane and  Director-General National Pension Commission (PenCom) Chinelo Anohu-Amazu at the event.

Chuks Udo Okonta

A new phase known as defined ambition pension system will soon berth in the Nigerian Pension Industry.

The system according to an expert will enable pension contributors determine the amount they want at retirement, which is contrary to the present defined contributions where contributors do not know the amount they are entitled to at the time of retirement.

Ex-Commissioner, National Pension Commission (PenCom) and Principal Partner/Chief Executive Officer, Retirement Benefits Advisory Dr Musa Ibrahim, while speaking on the new system at the  Conference on Pension Reform Act, 2014, with theme: “Sensitising major stakeholders on Developments ushered in by the Pension Reform Act 2014” organised by PenCom in Lagos, urged pension stakeholders in the industry, especially PenCom and operators to begin to work out measures to align with this system which is being entrenched in other climes.

 According to him, the need for the new system has become necessary due to some deficiencies in the present defined contributions.

He said the new system allows people target what they want at retirement, stressing that that is missing in the present system.

Ibrahim also expressed misgivings over the making of pension a constitutional issue. He noted that pension ought to be a contractual agreement between employers and employees.  

Participants at the event