PFAs have paid over N260 bn to retirees - PenOp

Chuks Udo Okonta 

Pension Fund Administrators (PFAs) have paid almost N260 billion  to retirees from inception to March 2015, the Executive Secretary Pension Fund Operators Association of Nigeria (PenOp) Susan Oranye, has said.

 She disclosed this at the Workers' Day celebration in Lagos, while urging all workers to join in the contributory pension scheme to secure a better future when they are retire.

Speaking during the event at the Onikan Stadium Lagos,  Oranye said the essence of  Penop’s involvement in the May Day celebration is to celebrate the Nigerian worker, celebrate the hard work that Nigerians go through every day and to encourage them to prepare for the future. 

“As you are work very hard today, you must remember that there will be a time when you can’t work as hard as you work today. When you retire and your salary stops coming in, you will still need to cater for some other needs. That is the essence of having a pension,” she explained.

She further explained that it is eight per cent of the worker’s basic salary, housing and transport and the employer is required and employers are to match it with 10 per cent of that same emolument and that goes into employee’s account.

According to her, “the contributory pension scheme, which has existed for about 11 years, has recorded its successes. They have paid almost 260 billion  to retirees from the inception to March 2015. As at last year, we had 5.5million contributors in the contributory pension scheme, it has gone up by 6.4 and we have just ended the first quarter.”

On workers in the informal sector, Oranye noted the informal sector contributes to the bulk of the Nigerian economy which cannot be ignored adding that there has to be a framework that caters for the uniqueness of the informal sector. In this regard, she assured that the National pension Commission and Penop are collaborating and working very hard on a framework that will accommodate the informal sector, so that everybody who works will have the opportunity to set up a retirement savings account. 

The framework is being discussed among the operators, stakeholders and the National Pension Commission.While shedding light on the compliance rate, she said, “the population of Nigeria is approximately 172million people and half of this makeup the working population, which is 80million people, with 6.4 currently in the contributory pension scheme. This she said is a huge success. 

“In the pension reform act of 2014, compliance is a major issue. Employers are demanded by the law to set up retirement savings account for their employees and make sure they remit. For those employers who do not comply, the National Pension Commission has recovery agents that will track them down.  

Any employer who does not comply will be held liable by the law,” she added.

Oranye however reiterated that there are still so many people who need to be educated, not just about pension but about financial literacy and PenOp is actively involved in seeing that the audience are educated.

"We are also involved in the National Financial Inclusion System, where we are trying to increase the level of financial literacy across the country and it is our core responsibility to raise the awareness. We arrange forums with the media and employers in different locations to get people educated and let them know what it is all about,” she said.