The federal government, pension adopting states as well as private companies have paid N203 billion as monthly pension contributions into the Retirement Savings Accounts (RSAs) of their workers in the first quarter of 2021, LEADERSHIP can report.
Out of this total, the public sector accounted for N115.83 billion translating to 57.03 per cent while the private sector contributed N87.27 billion or 42.97 to the pension kitty.
In a document released by the National Pension Commission (PenCom) and sighted by LEADERSHIP at the weekend, the cumulative pension contributions received from both the public and private sectors from inception to the end of the first quarter of 2021, amounted to N6.91 trillion, up from the N6.70 trillion as at the end of the Q4, 2020.
This pension plan ensures workers have a better life after retirement, as their pension contributions would be spread over a certain number of years, to be paid either monthly or quarterly depending on the choice of the pensioners.
Similarly, the commission disclosed that during Q1, 19 Pension Fund Administrators (PFAs) registered 3,292 contributors under the micro pension plan (MPP), adding that, N16.7 million was remitted to the RSAs of 435 contributors during the period.
In the quarter under review, 25 states of the federation had enacted pension laws on the contributory pension scheme (CPS) while seven states were at the bill stage.
Out of the five states operating other pension schemes, four states have adopted the contributory defined benefits scheme (CDBS), while one, Yobe State, operates the defined benefits scheme (DBS).
Speaking in Lagos at the weekend, the president, pension fund operators association of Nigeria (PenOp), Wale Odutola, noted that, “the pension 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 practiced 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.”
While stating that good things can be improved upon, he said pension penetration in Nigeria is still very low when compared with its contemporary countries.
Nigeria, he said, currently has a pension penetration rate of approximately 11 per cent of its labour force, adding that, this pales in comparison to 19 per cent in South Africa, 20 per cent in Kenya and 77 per cent in the United Kingdom.
“Consequently, it goes without saying that the industry needs to deepen its level of penetration, especially in the informal sector,” he added.
Another area of improvement, he added, was the level of pension assets to GDP. Nigeria’s level of pension assets to GDP, he said, is only a little over seven per cent while in developed markets, it’s typically above 100 per cent.