The Federal Government forecasts it can increase the nation’s pension plan assets by nearly 300% from $27.2 billion (about N4.216 trillion) March 2014 figure to $100 billion (N15.5 trillion) over the next 2 years.
From a deficit of about N2 trillion (about $12.9 billion) in 2004, Nigeria has in ten years accumulated pension assets to a record N4.216 trillion, showing some 9 percent of the nation’s old GDP and 5 percent of the rebased figure.
Speaking on Monday in Abuja as he declared open the World Pension Summit, ‘Africa Special,’ President Goodluck Jonathan said this leap in pensions was buoyed by sustained policy innovation and meticulous management which had facilitated confidence and credibility in the pensions system and administration.
The two days summit, the first in Nigeria and indeed Africa, has the theme, ‘Shaping the Future’. It will focus on key lessons learned amongst African nations and help them share experiences on relevant topics and developments like pension investments, risk management, funds management, administration, regulatory essentials and communication/ financial literacy.
At the event, Jonathan recalled that the pension reform Act was enacted by the Olusegun Obasanjo’s administration in 2004 to address the recurring challenges experienced in the administration of pension and enhance efficiency the system.
The reform initiative established a contributory pension scheme for the public and private sectors.
The president noted that apart from the sustained policy innovation and meticulous management, reforms have also strengthened the nation’s pension institution leading to a transition from a deficit of about N2 trillion in 2004 to an accumulated pension asset of over N4.21 trillion.
“If we could move from a deficit of about N2 trillion to a positive of N4.21 trillion, which is about $27.2 billion in ten years, that means that
in another two decades, we should get up to $100 billion,” the president stated.
He told participants that as provided by the pension Act, the Federal Government has restructured the system of administration of the defunct defined benefit scheme in the public service by setting up PenCom transitional arrangement department and appointing its substantive head in order to improve the scheme.
“Our goal is to digitise pension payments and streamline payment procedures to ensure prompt and ease of payment of pension benefits,” he added.
The president further noted that the new 2014 Pension Law which he just signed last week, repealing the 2004 pension reform Act, will consolidate reform gains and identify implementation challenges.
He specifically noted that the new law will provide the enabling legal environment to facilitate the creation of quality instruments through
which pension assets can be best invested for infrastructure and real estate development.
He observed that Nigeria’s reform experience has encouraged a number of African countries to understudy the nation’s pension reforms, share ideas which, according to him, will help the continent.
The president, however, stressed that as nations share experiences and seek input, the protection of pension’s assets by the payment of retirement benefits as at when due should always be the paramount objective.
