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Chuks Udo Okonta
The proposal before the National Assembly seeking the payment of 75 per cent of retirees pension benefits as lump sum at retirement destroys the very essence of pension, the Managing Director, IEI Anchor Pension Limited, Glory Etaduovie, has said.
He disclosed this at the Annual General Meeting (AGM) of the National Association of Insurance and Pension Correspondents (NAIPCO) in Lagos, stressing that many who may agitate for the 75 per cent lump sum in the name of business investment or building a house, may lose their money for not being skilled in business.
He maintained that managing bulk sum is not an easy skill – especially if it looks like your last chance for income at old age. “We will all get there. Aging is the alternative to dying. We must not forget. Building a house should really not be with pension,” he said.
He noted that ignorance on the activities of the industry is disturbing, adding that even many of our leaders show this symptoms. He urged leaders to cherish and grow the industry as pension is a social service and contributory Pensions is pro-government, pro-people, hence, we simply cannot play politics with it.
Etaduovie said pension funds is not a pool of funds that can be accessed easily, as thought by many, adding that they are individual accounts just like personal accounts. “No one can access more than he can. It took a lot of planning, discipline and diligence to assemble the Pension funds,” he said.
According to him: “75 per cent lump sum proposal destroys the very essence of pension – a steady income at retirement. This looks exciting on hearing same but not futuristic. Steady pension payment is to both re-settle a retiree into a new life without creating a radical difference, retaining income consistency and considering the length of time one may live, up to 30 years of life after retirement.
“Children are less dependable as insurance when unemployment and under employment is high. But, Many who may agitate for the 75 per cent lump sum in the name of business investment or building a house, may lose their money for not being skilled in business. Some may be duped of it. Managing bulk sum is not an easy skill – especially if it looks like your last chance for income at old age. We will all get there. Aging is the alternative to dying. We must not forget. Building a house should really not be with pension.
“It must be emphasized that the common complaints of delayed payments are not from the PFAs but the effects of transition from the old scheme to the new one. The Government is making efforts to pay up the accumulation of the old scheme to update the individual retiree accounts. Hence, a lot of emphasis on using the Paris club fund for Pensions and salaries arrears,” he said.