The Pension Fund Operators Association of Nigeria (PenOp) has urged employers to join the Contributory Pension Scheme (CPS) and register their workers under the scheme. This was discussed during the virtual training organized by (PenOp) for members of the National Association of Insurance and Pension Correspondents (NAIPCO).
The event saw experts call on employees across board to remit their workers’ monthly contributions in order to ensure that employees have a secured life after retirement.
The Contributory Pension Scheme, which is targeted at improving the social security of the citizens was introduced in 2004 to serve as a replacement for the unyielding Defined Benefit Scheme (DBS). The CPS requires the employer to contribute a minimum of 10 percent of the employee’s monthly emoluments while the employee contributes a minimum of 8 percent to employees’ pension account.
Omagbitse Barrow, a facilitator of the Financial Reporting training, highlighted compliance, contributions, investment, service support and withdrawal as the key areas in the pension system whilst also briefing that the biggest change between the Contributory Pension System and Defined Benefit Scheme is that the former allows the employee as well as the employer to contribute.
He proffered that productivity be improved to boost retirement benefits for pensioners in the CPS. “The higher the contribution, the higher the funds,”
Decrying high level of ignorance on the withdrawal mode, Barrow noted that this poses a big challenge to the growth of the industry. He, therefore, urged the public to seek understanding of the withdrawal modes during the registration process so that they are better informed on the exit options, which are; annuity and programmed withdrawal.
Oguche Agudah, CEO of PenOp said the inherence of pension matter requires a proper understanding of the industry. “people are very emotional when it comes to their pensions and any chance or story about their pensions getting lost, stolen, embezzled, or losing value causes a lot of negative emotions amongst contributors.
“We have a responsibility to break down salient aspects of the scheme and pensions in general to the public in simple, easy to read and understandable language” he said.