nex:
Millions of Nigerians are heading toward defectively funded retirement, leaving a lot of them cynical about pension plans in the country and how the pension system works because they don’t want to lose their many years of labour to shylocks. Without sufficient income, mostly older adults who eventually rely on pension will lack the resources that enable them to live self-reliantly, access basic health care, and continue to play their roles in the society.

Plenty of workers unquestionably have doubts about these things and that’s obviously why only a fraction of the workforce has a pension plan. While pension plans has kept majority of older adults from sinking into destitution, far too many retirees are having trouble making ends meet.

Before our discussion takes centre stage in planning a successful retirement, we need to comprehend why our retirement is primarily of utmost concern in the first place. This may seem like an inconsequential question, but you might be surprised to learn that the key mechanisms of retirement planning run contrary to common belief about the best way to save for the future. Furthermore, proper enactment of those key mechanisms is essential in ensuring a financially secure retirement. This involves looking at each possible source of retirement income.




Quick Understanding about Pension Plan

A pension is designed to help you fund your retirement and replace the income you are no longer receiving from working. It can fit alongside all your other savings, from bank and building society accounts to property.
Pensions could be one important way to support your retirement. Another may be your home (some people talk about their property as their pension) and another could be all your other savings and investments such as deposit accounts and shares. Your retirement income may come from any combination of these.

But is there really anything to worry about? Is it safe to commit your money to a pension firm and expect to get it back? There’s certainly a lot that people need to know about how pensions work and how safe it is for them to have a pension plan.

First off, we need to be up front about the prospects of the National Pension Commission (PenCom) set up by the government to oversee all pension firms in the country. Their job is to make sure your money is secure with the pension firm you choose and that your business with the firm keeps moving smoothly. So if anything happens, the commission is empowered to step in and sort it out for you so you never get to lose a single naira.



Besides, people who think their pension firm will divert their pension need to know that pension firms don’t spend the money or use it for private purposes. By saving your pension or maintaining a pension plan, through your custodian, you’re able to put your money in a range of investments, such as the stock market, commercial property, bonds, and funds. The range of investments will depend on the scheme; you’ll even have some more money than what you’ve put in over the years.

When your employer deducts some of your salary as pension, they pay this money to a pension fund custodian. This custodian company then notifies the pension firm that you’re registered with. Then your pension firm updates your accounts with them and there are no stories. So even if your pension firm ever goes under (which is really improbable), your money is safe with the custodian.



Additionally, every pension firm is mandated by law to maintain a statutory reserve fund that they mustn’t take from at any time. It’s with this money they get to meet up if the PenCom steps in and asks them to pay up pensions that are due.

Even at that, there are people who think the government might take from their pension money. But of course the government doesn’t involve itself in the affairs of the pension firms and certainly won’t have access to your pension. The PenCom is the only government body that’s involved here and they only regulate and make sure your money is safe. They don’t take your money. They make sure nobody takes your money.

You can start taking from your retirement savings when you retire or when you’re 50 years old depending on your agreement with your employer. So normally a pension plan is basically like a savings account where you get to keep your money over time and then take from it later. But with your pension you normally can’t take from it until your retirement. This makes sure you don’t eat into your savings and jeopardise your own retirement.

But the good part of having a pension plan is that you could actually get up to a quarter of your pension right now if you ever lose your job and can’t get another one within four months. So you can get by with some of your money until you get back on your feet, and if you have to pay for healthcare or if your daughter’s university tuition is due while you’re between jobs for instance, your money will be readily available to you.

What’s also good is that your pension firm won’t just collect your savings and keep you in the dark. They’ll be in touch with you and send you regular updates about your account and how well the investments they making on it for you is doing. So at every point you’ll know how much you have in there to keep you assured that your money is safe. This is actually the way it works.


Even more disconcerting is the fact that the poverty rate among older adults in Nigeria is alarming, one of the highest among less developed countries. The major reason so many older Nigerians become poor when they retire is the lack of proper pension plan to complement our retirement.

Another reason is that, a lot of employers don’t get a pension plan for their employees and these employees don’t bother to seek out a good one because of their scepticism. But really it’s very important for Nigerians to think about the future and personally get a pension plan where they can put aside something for the future, so they can have something solid to fall back on when they retire.

Without your own savings to add to the mix, you’ll find it difficult, if not impossible, to enjoy much beyond the minimum standard of living when old age comes knocking. This situation can quickly become alarming if your health takes a turn for the worse.



Unforseen things happen all the time and without a backup it can be especially difficult coping with these circumstances when they happen. For instance, people have had their entire business wiped out by a fire
and have had to start from scratch at an old age.

Old age typically brings medical problems and increased healthcare expenses. Without your own nest egg, living out your golden years in comfort while also covering your medical expenses may turn out to be a burden too large to bear – especially if your health (or that of your loved ones) starts to deteriorate.

This is a completely avoidable situation, and it’s important for the Nigerian people to take the right step as they move onto the future.


SOURCE: http://www.barbaric.com.ng/how-safe-is-it-to-have-a-pension-plan-in-nigeria

kaeforum:


The only pension plan that works is a personal pension plan, govt funded programmes dont work, history has shown that govt at the end of the day draws down on these funds leaving the pensioners with nothing after somany years of saving.

Look at case of Kogi state govt that embezzled pension funds of its workers. The guys in power were mere brats when these funds were created.
Imagine having your savings wiped out because some reckless brat in power.
Wars inflation and indebteness can make govt to enact laws to seize pension funds.

Personal pension plans is the best , as this is one personal duty.

kennyman2000:



Am not scaring you Madam. its a public. Atimes, the old man would just shed tears while lamenting of how his pension funds was deducted easily, but to collect was wahala.. dont wanna remember the scenario again jooor..

I just thank God. one of his child is averagely well to do. He's the one who asked the old man to forget it as the issue has started affecting the old man BP.

Sagamite:
Very useless article by Najeeb Bello.

One would expect anyone smart enough to have investigated and reported on how pension funds appreciate in value and how much commission is being paid to fund managers.

dicefrost:
What happens if the person dies before retirement?

Kachisbarbie:


are you for real?
You are scaring me...

Where did the man(RIP to him) work, private/public?

kennyman2000:
i will never advise anyone to subscribe to it.. Having seen what my friend dad's went through before he died. its one story or the other.

His children couldnt claim the funds as well, as the stress and document upon document wahala was frustrating. They had to let go, not until when i stumbled on this thread. Thats when i wept for Nigeria.


https://www.nairaland.com/1489204/how-pension-managers-cheating-nigerians


check my signature for ur customised wristband.

dicefrost:
What happens if the person dies before retirement?

fpeter:



If the employee dies before the age of 50 or retirement age as stipulated by the laws of our country
then his NOK would be given the benefit. But he/she must turn up with the necessary documents.

otunsman:
Don't you see retirees from public services protesting over the non payment of their arrears?I had a bad experience with my former employer in the private sector too.

fpeter:


If your friend's dad had a pension plan and well documented contributions then i see no reason why his family will not be able to access
his death benefit upon his demise. Did he name a next of kin? I work with a Pension Fund Administrator and i can tell you categorically that
it is safe to have a retirement plan in Nigeria.

Miranda11:
ADVICE PLEASE: What happens in a situation where your employer makes the deduction from your salary and does not remit these deductions into your pension fund, what are the employees rights and what is the best way to resolve this? I know of someone who has this problem and it has been going on for over a year now, no reasonable explanations have been given for this by the employer

Nigga44:
I will never advice anyone to open a pension fund cos I witnessed how my uncle suffered just to withdraw his funds

After he died, his children were asked to get one letter(letter of administration, I think). The said letter from what I heard could take up to 7 years to get in Nigeria. And it still doesn't guarantee the payment of the funds after all the hassle.

Pension fund is just a big scam in Nigeria. The younger workers in these companies may not know, but the administrators do.

For me the best pension in Nigeria is investment in real estate. Buy a cheap GENUINE land and watch the value grow over time. You can never go wrong here.

AjanleKoko:


I thought I was the only one who noticed that the article was a typical Nigerian journalist's Countryman Analysis
Is this fellow an actual finance journalist?

We are interested in knowing how the fund has grown, what the NPV of the 75% invested in FG securities and instruments is as at today, and what the other 25% is being invested in. All regular boring old financial stuff.

vitality22:

What is the guarantee period of annuity please?
And at the death of the owner of the annuity account after the guarantee period, what happens to the next of kin?
Am waiting for your reply please

kennyman2000:
i will never advise anyone to subscribe to it.. Having seen what my friend dad's went through before he died. its one story or the other.

His children couldnt claim the funds as well, as the stress and document upon document wahala was frustrating. They had to let go, not until when i stumbled on this thread. Thats when i wept for Nigeria.



https://www.nairaland.com/1489204/how-pension-managers-cheating-nigerians


check my signature for ur customised wristband.

congi:

What are the required documents please for one's NOK to access the fund in the event of death? What documents are required to access the funds in the likelihood of job loss?

kamez:
having a pension plan in NIgeria is a total waste of time. and I'm speaking from experience .

my mum retired as a senior lecturer and HOD of French dept in a federal university in the east in 2010.
she actually opened a pension fund in 1993.

after she retired, she kept on travelling with documents up and down just to get her pension from FBN until she died in 2013.

up till now we ve not received a dime from this same people even after submitting all the documents.

almost 10 million naira just disappeared with the wind.


my advice: invest ur pension savings into real estate. instead of the yeye pension. fund

jibbish:

Ur pension fund administrator takes the blame. They are to make sure that the company plays its part as u play urs