BY EMMA UJAH
ASSOCIATION of Pension Operators in Nigeria, PenOp, has faulted the withdrawal of some federal government organization from the Contributory Pension Scheme, CPS, especially the military, warning that the old scheme is unsustainable.
Speaking at an interactive session with journalists in Abuja, Chairman of PenOp Mishahu Umar Yola, argued that a return to the old pension scheme would spell doom for the Nigerian economy, arguing that it could bankrupt the government.
Yola who is also the Managing Director of Legacy Pension, said “The old pension scheme is unsustainable. In fact that was why the federal government came up with the CPS as an alternative scheme that can be sustained over the years and will not constitute an unnecessary drain to public coffers.
“The old order can run the government bankrupt. That is part of the trouble in the Eurozone where the governments are bearing heavy pensions burden and some now have to increase the number of years of service before their citizens are allowed to retire.”
“We now have in Nigeria, a situation where some people worked for only between 20-25 years and have been enjoying pension for more than 40 years. It is only in Nigeria that you can see someone retire and is still receiving a pension that is close to what he was earning as salary when in service.”
Future of employees
Chairman of PenOp urged all employers to embrace the CPS, which he described as the most functional way to secure the future of employees and that the aggregate pool of pension funds could also be deployed to provide high profile infrastructure in the interest of the general public.
In a presentation, Ms. Idu Okwuosa of Stanbic IBTC Pension, said about N1.414 trillion has been contributed by 5.24 million contributors since the beginning of the scheme in 2006.
According to her, 60 per cent of the fund had been invested in federal government instruments considered as the safest, with investment in government securities standing at N1.009 trillion; Ordinary shares N136.6 billion; state government securities, N64.019 billion; corporate debt securities, N27.168 billion; money market securities, N150.587 billion.
She added that N7.256 billion has been invested in open/close-end fund, another N386 billion in Real estate; private equity holds N2.480 billion; while other assets have N16.996 billion.