Continuous retiree engagement has been identified as key in the promotion of the Contributory Pension Scheme (CPS) and the overall success of the pension reforms in Nigeria.
The Pension Reform Act 2004 was the institutional basis for pension in both private and public sector of the country. Prior to the reform, the Defined Benefits Scheme was overwhelmed with huge pension liabilities from inadequate budgetary provision by government, which did not take into cognizance increases in salary and pension and resulted into delay of pension payment and death of retirees.
Obiora Ozoekwem, regional manager, TrustFund Pension said during the company’s pre-retiree and retiree forum, in Lagos, that the young industry needs regular engagement with retirees to bridge the knowledge gap and increase penetration of the pension scheme in the country.
“This industry is very young, barely 10 years and modifications are coming out on a daily basis; the only way they can get accurate information and update is by having this kind of engagement with them. So that one-on-one they can give us feedback on what they want us to improve on, and we can always update them on new things in the industry.”
According to Ozoekwem, the retiree forum offers opportunity to interact with retirees. “When somebody leaves his place of work, information available to the individual becomes minimal, if we cut them off without engaging them regularly, a gap grows,” said Ozoekwem as he explained that feedbacks ensured improved retiree pensions.
“Retirees get statement of account through e-mail, and also help TrustFund to educate their clients on the importance of programmed withdrawal over annuity.
He said the essence of the forum was also to intimate retirees on the various investment portfolios available to them under the programmed withdrawal scheme.
“The essence of the programme is to let them know that if money is not given to everyone, it is for people that retire within certain period. The second reason is the new investment structure for those still working, before now our investment functions were standard; we only allowed certain investment like the money market, equity market, and few other bonds like FGN and state bonds,” he stated.
Under the contributory pension scheme, Ozoekwem said clients are profiled based on their lifespan allowing them for benefit from pension pays with increased income.
“There is a new function in place where customers have been profiled according to age; so you have the right now to say I don’t want my money to be invested in fund one; or I don’t want my money in fund one, please move it to fund two. What this means is that for people with longer years to work, they can opt for investment that will give higher returns but come with minimally higher risks,” Ozoekwem said.
Before the pension reforms, the private sector hardly benefits from retirement schemes, while the management of the old pension scheme in the public sector was largely weak, inefficient, less transparent, cumbersome, and dogged by corruption.
SEYI JOHN SALAU
