11% Pension Penetration Worries Operators

Stakeholders in the pension sector at the weekend reviewed the performance of the sector 17 years after its reform as well as since the introduction of the Contributory Pension Scheme (CPS).

The operators noted that though there have been remarkable growth and achievements in the industry, Nigeria still lags behind many other countries in pension penetration with the current penetration rate of 11 per cent.

The stakeholders spoke at the third annual PenOp-National Assembly retreat organised by the Pension Operators Association of Nigeria (PenOp) in Lagos.

The stake holders also highlighted issues that should be addressed to keep the sector continually on growth track and ensure deeper penetration of Pension scheme among Nigerians

According to them, there is need for strong political will, especially among state governments, determination for self-regulation among the sector operators, capacity building, technological advancement and assurance of better future to Nigerian workers who contribute to the pension fund as well as predictable policies on the side of government in place of policy somersault.

PenOp President, Mr Wale Odutola who is also the Managing Director ARM Pension Managers, noted that in the past 17 years, Nigeria’s pension industry has certainly come a long way from when the Pension Reform Act was initially passed in 2004.

According to him, the industry has moved from a largely unfunded pension system to one that is fully funded, professionally managed by mainly private sector, adding that the CPS 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. The investment, risk and compliance professionals within the industry can favourably compare to their counterparts anywhere in the world.

“Indeed, the industry has bred a new class of pension professionals across board over the years,” he observed. He, however, said despite these, there are many areas where the sector fall behind its counterparts in other countries.

“One area is the level of pension penetration. Nigeria currently has a pension penetration rate of approximately 11 per cent of its labour force.