Despite N2.19 Trillion Payouts, Pension Industry Grapples with Lingering Image Issues, Says PenOp

By LOVETH AZODO, Lagos

…As PenCom Approves N7.89bn for 649 Contributors’ Mortgage

The Pension Fund Operators Association of Nigeria reveals that the N2.19 trillion disbursed under the Contributory Pension Scheme (CPS) hasn’t fully dispelled the negative legacy of the old pension system over the past fifteen years.

In tandem, the National Pension Commission (PenCom) approved the disbursement of N7,887,611,972.93 to 649 CPS contributors seeking residential mortgages.

During a media parley themed ‘At the Dawn of 20 Years of Pension Reform, What Are The Gains?’ PenOp CEO, Oguche Agudah, highlighted the almost doubled contributors’ funds, with a 46% return on investment, propelling pension assets from N14.42 trillion in 2022 to N17.35 trillion in the reviewed period.

Breaking down the N2.19 trillion payouts over 15 years, Agudah outlined N1.63 trillion for lump sums under programmed withdrawal and annuity, N208.86 billion for the 25% balance for job loss programs, and N356.32 billion in death benefits to 91,214 beneficiaries.

Public sector contributors accounted for N8.87 trillion of the N17.35 trillion, while private sector contributors added N4.5 trillion, constituting 54% of total industry assets.

Agudah noted the recovery of N24.8 billion in outstanding pensions from non-compliant employers. Despite economic instability and legal challenges in 2023, the association remains resilient.

Stanbic IBTC PFA CEO and association President, Olumide Oyetan, acknowledged the enduring shadow of the old pension scheme’s challenges on the CPS’s reputation.

He emphasized the industry’s commitment to transparency, leveraging technology for streamlined transactions and communication.

“the pension formal image under the old scheme still hunt us till now despite we have been able to change the narrative, retirees do not need to go queue at the bank under the sun as they receive their money in their RSAs and contributors receive statement of their account in their phones.

“What we project is transparency of the pension funds. We stand as the bedrock powering the country. All the funds in our possession is very well accounted for,” he said.