The nation’s pension industry has come to stay, contributing significantly to the economy and with larger portion of the fund presently in the hand of the federal government through bonds. Dapo Akisanya, managing director/CEO, AXA Mansard Pensions Limited in this interview with Modestus Anaesoronye shares his thought on his career, role of pension industry in the economy, impact of the multi-fund structure on contributors and need for increased financial literacy programmes to stimulate interest and understanding of the Contributory Pension Scheme (CPS). Excerpt:
Let’s meet you formally?
My name is Dapo Akisanya, the managing director of AXA Mansard Pensions Limited. I have been the MD since June 2015. Before then I worked for ARM Pension Managers and I also worked as executive director ARM Securities; and previously, I had headed investment management and research at the same ARM Group. It was after then I became executive director at ARM Pensions. Earlier in my career I spent about six to seven years in banking with City Bank, Nigeria as well as Stanbic IBTC Bank. At some point also, I had some consulting experience. That is my professional background in a nutshell. In the pension industry, outside my responsibility as the CEO of Axa Mansard Pensions, I serve at the Pension Fund Operators Association executive committee as head of Technical.
Planning for retirement is a language a lot of young people doesn’t like to hear, given your experience in the pension industry all these years, what is the attitude of the average young Nigerian?
I must say that the level of appreciation of retirement planning is not where I would like it to be. I don’t think its ideal. Whilst I find some level of understanding about what planning for retirement entails among a number of people, a lot of them have not taken the necessary steps to start proper financial planning towards that time. There is also a challenge in my view around the level of financial literacy and understanding of finance, and investment in general. So, what I find is that a lot of young people will rather prefer to keep and manage their money than giving it to the professionals to manage for them. I think there is a lot of enlightenment that needs to occur around young people, particularly in terms of highlighting the advantages of being part of the Contributory Pension Scheme(CPS) that we manage, given the level of safeguards that has been put in place to protect contributors.
When you look at the track record of the CPS thus far since over a decade when it has been in existence, it’s been a strongly positive story in terms of the integrity of the scheme; in terms of the overall investment performance that we have been able to achieve. Also, in terms of ability to serve retirees post working life, so far, we haven’t had any issue in terms of being able to meet our obligations. I think these are strong positive testaments to the role our industry has played in enabling people have a secured future.
Yes, I was going to ask you how far the industry has evolved, and what is the future of the industry given the tough economic situation at this time where people are even losing jobs?
I think I can understand why you feel that the economic activities needed to create the necessary growths are on the decline. But the numbers show a different thing, since on month to month basis, we keep growing the numbers of subscribers. That is, new subscribers keep joining and contributing. We also continue to grow in terms of overall assets under management, and let us remember that there is a solid base of existing contributors who keep contributing and whose earnings are expected to rise and as those earnings continue to grow their contributions will be growing. Though what we have in Nigeria today is a situation where economic growth is much slower than we expect it to be, however it is positive. There is growth but it is marginal. But as long as we are growing, we expect that new jobs will be created, perhaps not at the extent we should see. But let us keep in mind that as stakeholders, from government to individuals on the street, people are not just folding their arms and looking at the state of things, there is effort to improve the trajectory in the economy, and hopefully we will also succeed in that line. You will definitely see the positive impacts on the industry.
Having said that, the pension industry in my clear view is here to stay. It is going to keep growing, and playing more and more central role in the overall development of the country. As you know today, this industry manages the largest pool of long term funds. Also you have to realise that along with our regulator and various stakeholders, there is a need to channel the capital that we manage and have under custody in a way that it is able to stimulate productive investment in the economy. So, we increasingly engage in a number of conversations with our key stakeholders and investors who are looking for long terms capital for productive purposes. I think more and more we will begin to see pension funds being involved in a safe manner in that kind of activity. The major concern I have and I think as well that a lot of my colleagues in the industry will share is that increasingly there seems to be the clamour by many groups to exit the CPS. A few state governments seem to face challenges in terms of their ability to execute the scheme. These are the areas of concern I feel we must all join hands and fashion out appropriate solutions so that we can take note of the concerns that those people have, manage them or address them in a way that everyone will be happy at the end of the day.
As an industry leader, what role is Axa Mansard Pension playing in contributing to the development of the industry?
Remember when I introduced myself, I mentioned some of the roles I play in the in the industry particularly at PenOp. I see it as a way for Axa Mansard to be directly involved in promoting industry issues. So, Axa Mansard through that platform contribute positively towards industry wide initiatives with other operators, as well as when there is need to engage other stakeholders, be it the regulator, be it labour, be it the legislatures, or even government, so we have been involved at different levels.
When the multi fund structure was introduced there was a lot of hype on what the benefits are going to be, now it seems its only you the operators that are playing in it, give us an insight on this?
I don’t think is entirely accurate to say nothing is happening. The multi fund structure has been implemented and contributors have been placed in the different funds that match their life cycle stage. I think what perhaps you want to say is that you have probably not seen a directly obvious impact on the financial market. But I am not sure if that will be entirely accurate, because as result of the multi fund structure, there is an increasing need for operators to deploy more and more of the assets towards variable income asset classes, Variable asset income classes consist of more types of the instrument beyond what we traditionally talk about, which is equities. So, variable asset classes will include alternatives assets such as private equity funds, infrastructure funds, real estate and a host of others.
