Business environment’ll determine success of PRA —Expert

Adediji

By Nike Popoola

The Managing Director, Pensionscope Group, Peter Tai Adediji, has called on government at all levels to create a favourable business environment for employers to enable them to meet up with the 2.5 per cent increased contribution to workers’ Retirement Savings Account provided in the recently signed pension law.

According to a statement by the firm, the increase from 7.5 per cent to 10 per cent for employers’ contribution may be counter – productive if adequate measures are not put in place to improve the harsh environment in which employers operate.

He noted that many employers might default in meeting the requirement due to the heavy overheads they were presently bearing.

Adediji lauded the efforts of the government in increasing the contribution to the workers’ Retirement Saving Accounts.

He said, "This new law, Pension Reform Act 2014, brought significant reviews to the PRA 2004. One of such is the upward review of the minimum rate of pension contribution from 15 per cent, with employee and employer contributing 7.5 per cent apiece to a minimum of 18 per cent with contribution from employee and employer increasing to eight and 10 per cent, respectively.

"With this increase in rates of contribution, pension funds would now increase in size to the advantage of the employee and the economy as a whole."

Adediji also called on employers and employees to embrace the scheme and make sacrifices capable of providing a secure future for workers.

"It is important for government at all levels to improve the living standards of the generality of workers in order to reduce the burden of the additional contribution. The present situation of workers where salaries have been swallowed up by all sorts of loans meet before the next pay calls for caution.

Source: Punch