Ibekimi Oriamaja Reports.
According to a report by the National Pension Commission, assets under the Contributory Pension Scheme increased by N842.73 billion in the first half of 2022, reaching N14.27 trillion as of the end of June (PenCom).
The commission published this information in its “Unaudited report on pension funds industry portfolio for the period ending 30 June 2022; Approved Existing Schemes, Closed Pension Fund Administrators, and RSA funds (Including unremitted contributions @CBN & legacy funds)”.
The data in the study shows that N9 trillion of the total funds were invested in federal government-issued bonds and treasury notes.
The money was also invested in various portfolios of securities, such as domestic and foreign common stocks, corporate debt obligations like corporate bonds, corporate green bonds, corporate infrastructure bonds, and supranational bonds.
According to PenCom, there were 9,795,957 RSA holders altogether throughout the time period under consideration.
The Pension Reform Act led to the establishment of the CPS in 2004. It offers a contributory system in which contributions are made to employees’ RSAs by both the employer and the employee.
The money held by the Pension Fund Custodians is managed by the Pension Fund Administrators.
According to the Pension Funds Operators Association of Nigeria, the CPS has helped Nigerians cultivate a culture of saving (PenOp).
Oguche Agudah, the Chief Executive Officer of PenOp, claims that before the act was passed, Nigeria had very little domestic savings.
He asserted that a large portion of Nigerians have no other options for saving money save the Contributory Pension Scheme. We as a nation need to be promoting more of these saves rather than attempting to undermine the system. Most Nigerian workers are probably only able to do this for their retirement years.
In fact, we need to encourage more workers to increase their mandatory deductions while they are employed because doing so would enable them to gradually increase their balances. The pension sector is taking the lead on this.
The paper notes that “stability and discipline in the contributions are what we need to promote more, which will even reduce the necessity for any big lump sum payment after retirement.”
In order to demonstrate how the savings work for the contributors, he provided the following example: “If a worker were to consistently save N20,000 every month for 15 years at an interest rate of 10% per annum compounded for the 15 years, at the end of the period he would have accumulated almost N16m. It is important to promote the consistency and compounding power that the existing system offers.
If you were wealthy when you were employed, prudent savings, such as a pension, will increase your wealth, he added. As a result, the pension will make your retirement comfortable.
The employee receives his RSA savings in addition to investment earnings under the CPS, claims the PenOp manager.
