‘Micro pension scheme will provide more investment funds’

Stanbic IBTC Pension Managers Limited, a member of Stanbic IBTC Holdings Plc, has said the proposed micro pension scheme has the capacity to increase asset accumulation in Nigeria.

It said the scheme would also provide the vital capital required for investment in critical sectors of the economy.

The Chief Executive Officer, Stanbic IBTC Pension Managers Limited, Mr. Eric Fajemisin, who spoke on behalf of the company, said as an initiative designed to cover over 70 per cent of Nigeria’s working population in the informal sector, the mini or micro pension scheme would offer enormous benefits to the society.

While speaking during an interactive session with journalists in Lagos, Fajemisin also reviewed some provisions of the Pension Reform Act 2014 and the impact on the Contributory Pension Scheme.

He said, “The micro pension scheme, when finalised, will 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.”

According to him, other benefits will 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, noted that the initiative faced challenges such as insufficient awareness and negative perception towards pensions, high cost of carrying out the CPS awareness campaign and lack of reliable data on the informal sector.

These challenges, he noted, were expected to be addressed before and after the commencement of the scheme.

On the enabling law, the Stanbic IBTC helmsman noted that the introduction of more stringent penalties for errant operators and directors, especially in relation to mismanagement of funds, had engendered greater corporate governance, making it almost impossible to misapply pension funds by anyone.

By increasing the contributions of the employer and employee to 10 and eight per cent, respectively, Fajemisin said the Act had ensured the availability of more benefits to contributors at retirement.