Why contributory pension alone can’t offer you good retirement

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Chuks Udo Okonta

Do you hope to live comfortably in retirement? You should therefore not rely solely on contributory pension – which is presently pegged at at a minimum of 18 per cent, 10 per cent from employers and eight per cent employees.

Comfortable retirement life, indeed, is a choice and required huge price, it is up to you to determine the level you should belong in retirement, which are either poor; average; good or comfortable.

To be comfortable in retirement, you should set contributory pension as one of the retirement investments vehicles and divest into other good and legit investments portfolios, such as insurance; mutual funds; shares; real estate, forex; knowledge wealth amongst others.

Limitations of contributory pension


Inflation is one major enemy of contributory pension funds. The value drops as inflation rises, therefore relying solely on it, may leave you in poverty due to the low purchasing power of contributed funds.

*Defaults by employers

Many employees’ hope for good retirement have been dashed owing to their employers inability to see through their pension contributions.

*Regulatory impasse

Regulatory impasse often bars people from building up their contributions. Presently the Pension Reform Act (PRA) 2014, bars people from making voluntary contributions directly without going through their employers. Such an impasse has deprived many workers whose employers are defaulting from increasing their contributions.

*Poor contributions

Owing to poor emoluments, pension contributions of several workers are poor.

*Poor yield

Due to the strict investments regulations, yields from contributory pension are often poor, as the fund managers can’t go beyond approved investments windows.

*Government’s inactions

Governments’ workers that relied solely on pension contributions, have continued to suffer years of neglect due to pension accrued right issues.
This clearly shows while contributory pension can’t be solely depended on.

To retire well, you should give keen attention to retirement matters. As I always state, ‘salary serves as breakfast, while monthly retirement benefits, dinner.’ Considering the time between breakfast and dinner and dinner to breakfast, more attention should be giving to dinner which is retirement.
Seek professional counsel today and divest your retirement investments into other portfolios aside contributory pension.

Thanks nicely for reading.

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