‘Pension Contributors now enjoy good returns on investment’

Having won two awards at the just concluded World Pension Summit-African Special, the Managing Director, Premium Pension Limited (PPL), Wilson Ideva, in this interview with Chuks Udo Okonta, spoke on this feat and where the pension industry will be in the next five years.

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Ideva

Double awards like these come occasionally. What is your feeling about the Premium Pension award?
In most cases, you work tirelessly, yet, it is not appreciated, but in our own case, our efforts are beginning to yield good results. We are indebted to God for that.
So, the two awards, which we won at the just concluded World Pension Summit-Africa Special – give a lot of excitement, taking into consideration the fact that of all the Pension Fund Administrators (PFAs) in the country and across Africa, Premium Pension is considered worthy of it.
One of the awards is for being the best in corporate governance, while the second is for being the best PFA with wide coverage.
The two awards are very special to us as a company. If you ask me whether we deserve this award, I will say we operate in a unique way that is different from other PFAs, which gives us an hedge over others.
We have a team spirit in Premium Pension, every person knows what is expected of him or her and we are all doing that. We are not building individuals here, but structures because this is the greatest challenge we have in Africa.
In Africa, most institutions are built around individuals, especially the managing director and when he is not around, the whole business collapses and when he comes in, everybody runs helter-skelter.
That doesn’t happen here. I am just first amongst equals, I see my team members as mates and every morning I go to every person to greet them office by office, and thank them as well as attend to the challenges they are having. That gives me a first hand view of the challenges they are having and what is going on.
In terms of corporate governance, here, you can confirm from the staff, we pride ourselves in the sense that whatever you are due to, gets to you, things are well structured.
Moreover, we are always proactive, we don’t wait until something happens before deciding what to do. We know what to do in every situation. These are things we inherited and we are building upon. For that fact, we are grateful to the founding fathers of this company for what they have done to make this PFA one of the best in the country and that was why we are able to win the best PFA award in corporate governance.
In terms of wide coverage, last year, we decided to promote the industry, simply because, we know that if the industry grows, the individual pension fund administrators will grow. I always told my colleagues that it should not be the case of making an advert for their companies, though that is good, but it will not build the industry. If we have a strong industry, we have robust industry, then, individual pension fund administrators will grow.
So, we started a campaign called ‘A Reward for Hassle’. The campaign, which has to do with the younger generation, was deployed through the social media. We are informed by the fact that the younger generation are not worried about pension, but how they can survive today. So, we decided to creat awareness amongst the old and the young. The campaign took us round the federation and if you see the followership on the various platforms – Facebook, Instagram and LinkedIn, it was well embraced. In the campaign, we had star prizes and the campaign was not theoretical. The star prizes winners were here and they were presented their prizes.
The campaign created awareness for the pension industry. If you hear of enrollment of 7.2 million contributors within the pension industry and contributions above N6 trillion, people will say the pension industry has done well. But if you compare that to the population and workforce, we are yet to start.
With the campaign, we are able to reach people we need to help plan their future through pension. The campaign cost the company so much, but the emphasis was not on Premium Pension, but on the pension industry. We encouraged people to enroll and the campaign had paid-off.
We also understand that we are in a rated business which we must put a face to. In the past three years, we have established 25 branches and you know what it takes to establish a branch in the country today, where you have to provide a generator, security and almost everything. We have created structures that will help the business to jumpstart and that is what we have, and always do.
Talking about coverage, there is no location in this country you cannot find Premium Pension. Even during the difficult times in the North East, we are in Borno, our staff were in Maiduguri, Yobe, Yola and Gombe States and they remained there.
Today, despite the militancy in the Niger Delta, we are there. There is hardly no state capital you cannot see the presence of Premium Pension. That is our measure of coverage and how we see the industry and that is why we are not surprised that we won the award.
People are talking of electronic age, we believe in it, but also we have clientele that are having challenges with electronic system, and this people we must carter for. They want to have a one to one discussion with a customer service officer, they want to have a place they can come and discuss with you about their pension.
Whether you like it or not, after your doctor, the next officer you should have a discussion with is your pension fund administrator. That is the message we are sending out to the public. Most Nigerians do not look at their statements. We do not know whether our pension fund administrators are making fair returns, above inflation rate return or real return which is above inflation. People do not care, but we have a duty as practitioners in the industry to enlighten people, create pension education so that people would be aware. If they are aware, it would generate a lot of interest in the industry. So, that is what we are doing, and I think that had stood us out and we are not relenting because we know that the reward for hard work is more work. We know that the challenge is going to be more fierce among our colleagues. We are ahead of the curve, we know where we are going and we are very determined. We did not want to be benchmarked with a Nigerian company, I must confess. We pride ourselves as international company with best practices, so we want to be benchmarked with the best companies any where in the world. And we must be seen as such in terms of our staffing, physical outlook of our offices, service delivery and information and communications technology platforms.
What we have here in our head office is replicated everywhere in the country in a small version. If you go to our offices in Awolowo Road, Ikoyi, Lagos, Benin, Port Harcourt, Enugu and Yola, what you see is a replica of what we have here. Whether it is the furniture or outlook, they are the same. If you are building a brand, it must be the same anywhere you are. That is what we are trying to do and it is what is standing us out.

Where did you think the pension industry would be in the next five years?
The future of the industry looks bright. On a daily basis, awareness is being created. At the start of the pension industry, contributors are not worried about their return in investment. So, there was nothing distinguishing one PFA to the other, but in the last two to three years, operators are beginning to distinguish themselves. Even within the industry, we know those with exceptional service delivery and information and communications technology.
So, in the next five years, there is going to be much awareness. When the new pension scheme started, People thought it was one of those government initiatives that will not stand the test of time. However, despite all odds, the pension industry still stands out. That alone has given the industry more exposure. In the next five years, retirement saving holders are going to be demanding improved services, contributors are going to demand better returns on their investment.
With improved awareness, contributors are going to mount pressure on their employers to ensure that they remit their contributions as at when due. Pension contribution is a collective effort between the employees and the employers. If your employer deducts your money and he did not remit as at when due, you are loosing value for your money. Hence, in the next five years, there will be more expectations on the PFAs on quality service delivery.
I expects a huge growth in the industry in the next five years. This is because the National Pension Commission (PenCom), which is the regulator of the pension industry, has done great works in terms of bringing financial inclusion among the non participants for now. We believe that in the next five years, we are going to see a growth that would be quite geometrical. I see enrollment climbing to between 15 million to 20 million and the assets under-management growing to over N20 trillion. The plane of the industry has taken off, we are not yet at cruising level, but we are almost getting to that. In the next five years, we may get to cruise level. A PFA that wants to be competitive in the market should be thinking of information and communications technology to be relevant in the next five years.
What will happen is that, we are going to see a shift from what we have in employers schedules – employers remitting for you, to individuals making contributions through their phones. It has happened in Kenya and Ghana and it is going to happen in Nigeria. Since every Nigerian has a phone and knows how to use a phone, a time is coming that when you have N1000 air time, you can transfer N50 to your pension fund administrator to be kept in your account and will get it back from your PFA when you need it, through your phone.

With the economy now in recession, can the pension funds be deployed to revive it as being done in other climes?
If you compare the volume of pension assets in the United States to what we have in Nigeria, there is a huge difference. We have not really started. The pension industry in the United States has been there for over 100 years. And the assets of the biggest PFA in the world is like that of two to three countries in Africa. So, they have large funds. But what we have, as a country, is not big enough to take us out from where we are today, although, it can play some roles, such as assisting to address infrastructure deficit in the country. That is why for now, pension funds can be invested in viable infrastructure. We are envisaging a situation whereby every Nigerian that has Retirement Savings Account (RSA) can have a house no matter the size. We are looking up to that period when pension asset can make that happen and it is presently being looked into.
We also want to see the government partner the regulator and pension fund administrators on infrastructure. If there are toll roads in the country and PFAs are allowed to invest in them, it would be a win-win for the parties. There have been a lot of discussions with the Minister of Power, Works and Housing and PenCom on this.
As operators, once there is a guideline, we will go on to invest. We want to invest. I am not one of the proponents that operators should be investing outside the country. There are too much challenges in our country that is calling for our attention than to invest outside one’s country.
What we are doing, as an industry, is keeping people long time savings. We cannot gamble with contributors’ money, we have to be sure where the money is invested in. The least that can happen is that when people retire, if they contributed N5, they should have the N5. You cannot come to tell stories that because I invested in infrastructure, instead of having N5, the contributor should have N2. Nobody will take that. People talk about pension assets as if it one money lying somewhere or government’s free money. That is not true. The funds are people’s money. What we are doing is holding the money in trust for them and that trust must not be breached. It is our best interest as operators to intervene, but we are waiting for the blue prints and when it is out, we are going to invest, whilst making sure that the funds are also secured. We do not want to put money in a government project and the next morning, they change the policy and the money is gone.

What measures should the government adopt to clear its outstanding pension accrued rights?
Yes, we are all going through a challenge and I know that PenCom is discussing with the government on how this could be done. What government need to do in this aspect is to raise bond specially for this purpose and ensure that people retiring are paid as at when due.
The Minister of Finance and others are highly intelligent people and I think they should raise bond to meet up with the outstanding and thereafter, continue to fund it as at when due. It is in the best interest not to go back to where we were before when people were queuing when waiting for their pension. We are willing to give our advice. I think pension is a priority for every government. People who have worked for government for the past 35 years cannot retire and we begin to tell them stories.

How would the awards impact your clients?
The awards are a measure of confidence to our retirement saving account holders, It gives them further assurances of what we are doing here, such that their funds are not only safe, but in the best hands. In terms of returns on investment, we have a mandate to return fair return to our RSA holders. We pledged to remain so for foreseeable future.
Our retirees payment date is on the 19th of every month and we also make return on their balances.
We are quite unique here and our DNA is that we do not benchmark ourselves with what is happening around us but what is happening in the world. We would not be carried away by the awards, we are going to ensure that we work harder than what we are doing.
There is actually a philosophy that underpins our operations. We do not look at pension as a business, we look at it as a social security. If you look at it from that perspective, that is the passion that drives everything that we do.
How do we come about paying our retirees on the 19th? We (staff) are paid on the 24th of every month. We then agreed to allowed our retirees to be paid before we are paid. So, if the last retiree is not paid, we will not get paid, which means that if a retiree has wrong account, we need to sort it out.
Before the awards came, we were the first pension fund administrator that got ISO certification. There was no requirement from PenCom for us to do that. We just feel we should not benchmark ourselves with local standard that we should benchmark with the best in the world.

Are you considering playing in the informal sector?
We have done a lot of awareness creation especially, in the informal sector. However, there is yet to be guidelines for the take off of micro pension. PenCom has asked us to give our inputs, which we have done. So, when the guideline is issued, every operator will key into it.

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