Home Breaking News Nigeria’s pension penetration level low, says PenOp

Nigeria’s pension penetration level low, says PenOp

0


By Omobola Tolu-Kusimo

Nigeria should deepened its penetration  beyond 11 per cent, the President, Pension Fund Operators Association of Nigeria (PenOP), Mr Wale Odutola, has said.

Odutola spoke at the just-concluded National Assembly retreat in Lagos. He stated that there was the need to note the areas where the industry lags behind other countries, one of which is level of pension penetration.

He said this became necessary because South Africa’s pension penetration is 19 per cent, Kenya 20 per cent and United Kingdom 77 per cent.

Odutola said the need to deepen pension penetration level, especially the informal sector, was necessary despite the pension assets growth of over N12.3 trillion and other milestones achieved.

Another area of improvement, he said, is the level of pension assets to Gross Demostic Product (GDP).

He said Nigeria’s level of pensions assets to GDP is only a little over seven per cent while in developed markets, it’s above 100 per cent.

He noted that while the level of our pension assets is relatively large in absolute terms, when you look at it in relation to GDP, it is actually low.

He said this meant that there was the need to increase penetration of the pensions scheme.

He also said while they could applaud the industry as it had grown in areas over the years, there were still areas that required improvement, noting that this was not lost on them.

He said they would continue to work with the regulator and other stakeholders, including the National Assembly, on several areas in the short and long terms.

According to him, these include market development, service delivery, national impact, upskilling of pension professionals and maintaining a sound and ethical environment within the industry.

He said: “On market development, we are engaging with market operators, the exchanges, the regulators, and international organisations to develop new and alternative products that pension funds can profitably invest in. It is in ours and our contributors’ interest to continually find new products and markets that meet our objectives. On service delivery, we realise that the industry needs to reduce its cost to acquire and serve its current and future contributors. We need to increase the level of technology adoption and collaboration within the industry on shared services and the likes.

READ ALSO:  Comedy Video: Mark Angel Comedy – Business Partner (Family Show)

“In addition, we are working towards ensuring that the pension industry has a greater positive effect on national development by increasing our funding for infrastructure and transformational companies, sectors and projects in a sustainable manner that does not jeopardise our fiduciary responsibility to the pension contributors who are the ultimate beneficiaries of the funds. We also need to continue the process of improving professionalism within the industry by focusing on learning and development and adoption of international best practices in our operations

“Then, we must work to protect the integrity of the industry, by ensuring a level playing field for all operators and a process to address grievances and other issues through a self-regulatory framework. I personally want to thank the National Assembly for their support in providing the necessary legislative framework for the industry to thrive. While we acknowledge the strides we have achieved, we look forward to your constant support and collaboration in our quest to provide a befitting retirement framework for Nigerians. I would also like to say that the continuous improvement of the industry rests on the shoulders of all of us at this retreat today. We all have our individual and collective roles to play. So, I call on us all to further actualise the dream of every Nigerian to retire knowing that their accumulated pensions would help to provide a fairly decent lifestyle for them throughout their retirement years.”

READ ALSO:  How Beninese Authorities Chained Sunday Igboho In Cell, Made Him Cry Like Baby – Lawyer Reveals

The PenOp chief said the growth of any industry is premised on communication among the key stakeholders.

Over the years, he said PenCom and the operators had built a strong and robust stakeholder engagement framework which has significantly assisted in the growth and development of the industry.

“We have also developed a strong relationship with the National Assembly whom we recognise as key partners in the industry. In the last 17 years, Nigeria’s pension industry has certainly come a long way from when the pension reform act was initially passed in 2004.The industry has moved from a largely unfunded pension system to one that is fully funded, professionally managed, and mainly private sector driven. We can all agree that the Contributory Pension Scheme practised in Nigeria, has adopted international best practices, is technologically driven and has grown steadily over the period.

“There is also a marked progress with respect to the level of professionalism within the industry. The pension industry has raised the bar for professionals locally. The investment, risk and compliance professionals within the industry can favourably compare to their counterparts anywhere in the world. Indeed, the industry has bred a new class of pension professionals across board over the years,” he added

LEAVE A REPLY

Please enter your comment!
Please enter your name here