By Tanko Mohammed
Stakeholders in the pension industry have stressed the need for enhanced pension asset investment to boost economic growth, amid uncertainties of the COVID-19 pandemic.
The stakeholders spoke at the Financial Sector Strategy 2020 third quarter pension sector virtual forum on Thursday in Lagos with the theme: “Pension Asset Risk Management in the Face of Uncertainties.”
Mr Wale Odutola, President, Pension Fund Operators Association of Nigeria, who was the lead speaker, said that pension asset was crucial for economic growth.
“Pension asset is crucial to any economy. We are seeing an ageing workforce, meaning that we need to manage the ageing retirees properly,” Odutola said.
He said that the pension industry had grown tremendously in the last 15 years, contributing about 15 per cent to the country’s Gross Domestic Product.
Odutola identified longer life expectancy, pension funds and liquidity of pension funds, as three factors affecting the growth of pension assets in the country.
Mr Misbahu Yola, Managing Director/Chief Executive Officer, FCMB Pensions, said that the nation’s economy had shown strong resilience to the COVID-19 pandemic especially, in the face of increased unemployment rate.
Yola said that there had been an increased withdrawal demand of the 25 per cent for contributors that were out of jobs due to the pandemic.
“There have been situations of transfer of risks from employer to employee. There has been a lot of demand for the 25 per cent of contributions. This has compounded the already low economic growth,” he said.
Mr Tolu Adeleke, a Partner in Financial Services, Pricewaterhouse Coopers, called for the deployment of strong digital solutions in the sector to drive growth.
Adeleke said that the pandemic had increased the pace of reliance on technology but hoped that cybersecurity was prioritised to reduce crimes in the cyber space.
Comrade Ayuba Wabba, President, Nigeria Labour Congress, said that all workers must be covered under the Pension Reform Act.
Wabba said that Nigeria’s Social Security Cover was around 20 per cent, whereas, other countries had over 90 per cent.
“Pension has been used to drive development and economic growth. We are encouraging all states, especially those that have yet to key into the Contributory Pension Scheme, to do so.
“We also would like to see transparency in the pension systems because even after workers’ contribution, the money is not remitted to PenCom. The PFAs need to do more because the market is huge,” Wabba said.
