From left: Chief Executive, Eric Fajemisin; Executive Director, Operations, Steve Elusope; and Executive Director, Investments, Oladele Sotubo; all of Stanbic IBTC Pension Managers Limited, at a media interactive session organized by the company in Lagos.
REMARKS BY CHIEF EXECUTIVE, STANBIC IBTC PENSION MANAGERS LTD, ERIC FAJEMISIN, AT A PARLEY WITH THE MEDIA AT RADISSION BLU VICTORIA ISLAND, LAGOS ON MONDAY DAY, MAY 28, 2018
Good morning distinguished Ladies and Gentlemen of the media
We are quite thankful to you for accepting our invitation to be part of this interactive session,considering your very busy schedules especially during this wet season.
Before proceeding, I want to place on record our appreciation to you for the unflinching support you have extended to Stanbic IBTC Pension Managers Limited and the Stanbic IBTC Group in general. This is a relationship that we cherish and will continue to nurture for mutual benefit. God bless you.
Distinguished guests, the purpose of this parley is simple: to interact and reflect on happenings in the pension industry. The ultimate outcome is to gain insight on how we can collectively move the industry forward.
You as informed participants in the field and will know that Nigeria has come a long way since the Contributory Pension Scheme was introduced in 2004. There was extensive reportage in the media recently quoting the National Pension Commission (PENCOM) to have saidthat thenet pension assets under the contributory pension schemehas grown toN7.94 trillion inMarchthis year.Similarly, the number of contributors reportedly has also increased to 7.82million as atDecember 2017.From inception to December 2017, the industry has been able to pay about N8.44billion to 223,051 retirees for both Programmed Withdrawal and Annuity.
These are significant accomplishments, considering the fact that the Scheme is just 14 yearsold. Thisgoes to show what is possible when there is a conducive operating environment, determination, organization and strategy.
At the rate we are going, we can only imagine what the pension landscape would look like in the next 14years. There is no doubt that with the right templates and policy framework, the pension industry wouldbecome a pivot for capital formation that is required for economic development.
For us at Stanbic IBTC Pension Managers Limited, we are delighted to be part of this laudable story. As you know, we are by far the largestpension fund administrator in Nigeria with assets under management in excess of N2.53 trillion and over 1.6 million retirement savings account holders nationwide. From inception to December 2017, SIPML has paidN66.5 billion to 37,772 retirees.
Though the industry is doing well currently, it is not yet Uhuru. There is still more land to conquer,great improvement required. The proposed micro pension scheme is one initiative with great potential capable of landing the industry into its next phase of growth. Regardless of the inherent challenges, the micro pension scheme has the capability to deepen asset accumulation in Nigeriaconsidering that 70 percent of Nigeria’s working populationoperatesin the informal sector.
Among its other benefits include improved standard of living for the elderly, safety of funds and access to other incentives, such as mortgage facilities, health insurance and estate planning. In addition are flexible contribution remittances, the opportunity to make withdrawal prior to retirement and the enhancement of financial inclusion in the country.The benefits are enormous indeed.
You would have heard too that another initiative – the multi-fund structure – is expected to kick off on July 1, 2018. The Multi Fund Structure categorizes pension fund investments into four funds by aligning the age and risk profile of RSA holders to match the four funds. Fund I is targeted at people of 49 years and below who want higher returns and are willing to take higher risks.Membership into this fund is strictly based on request. Fund 2 is aimed at people who are aged 49 years and below and still working but are satisfied with moderate returns and levels of risks. Fund 3 targets people 50 years and above but still working and have very low risk appetite. In Fund 4 are retirees who have the lowest risk profile of all categories.
I would not want to bore you with details of the scheme as this was the subject of a recent media seminar organized by PENCOM in Uyo. The most outstanding feature of this scheme, apart from diversification of pension fund portfolio, is the resolution of risk appetite based on the various categories of funds. For PFAs, the multi-fund structure provides considerable flexibility in terms of risks associated with the four classifications. We shall speak more on this during the course of this forum.
Whether we are speaking of the micro pension scheme, the multi-fund structure or the pension industry in general, one key imperative is public enlightenment and awareness. PENCOM and the operators in the industry could never do too much in this regards.
For Stanbic IBTC Pension Managers Ltd, we have various levels of engagements with stakeholders. About nine years ago, we introduced the retirees’ forum, a multi-city roadshow tointeract with retirees, foster reunions and unpack fresh developments in the industry. This was followed in 2014 by the pre-retirement seminars, another multi-city platform designed to encourage people to embrace retirement planning. In the same year, we also introduced the employers’ forum, another industry-wide initiative to encourage discussions on Nigeria’s pensions sector and to help more Nigerians participate in the fledging CPS. These initiatives, among others, have gone a long way in deepening participation in the pension scheme, and we will continue to do more.
Ladies and gentlemen, my brief is to welcome you to this event, but it looks as if I have already plunged into the nitty gritty of the session. Well, it is a reflection of my enthusiasm about the development of the industry and wellbeing of Nigerians. It is also meant to secure your support as you are the ones who would ultimately disseminate the information to the benefit of all.
Therefore, we must all pull together to sustain the growth of the industry; not just to benefit only retirees or employees, but also to create economic prosperity for all and ensure we enjoy some level of comfort throughout our lives.
I urge you to freely express yourselves during the session and to ask questions that will enable us have very fruitful deliberations that will no doubt lead to a better understanding of the workings of the pension industry in Nigeria.
Thank you for your attention.