The Pension Fund Operators Association of Nigeria has said the pension industry paid N1.63 trillion as lump sum to 442,000 retirees as of the second quarter of the year.

It also said that they were paid through programme withdrawals and annuity products

PenOp serves is the umbrella body for Pension Fund Administrators in Nigeria, ensuring the smooth operation of the pension system in the country.

Chief Executive Officer, PenOp, Mr Oguche Agudah, said this at a media parley with the title, “At the dawn of 20 years of pension reform, what are the gains?,” held in Lagos.

He disclosed that during the same period, N665.13 billion was paid to 111,708 applicants in lump sum payments for life annuities while N964.24 billion was disbursed to 330,201 retirees.

The CEO said that under the reformed pension scheme, 475,000 Nigerians, who lost their jobs, received 25 per cent of their Retirement Savings Accounts, amounting to N208.86 billion.

Mr Agudah said that the pension industry also prioritises the wellbeing of the beneficiaries of deceased employees.

He noted that in the period review, N356.32 billion was paid out as death benefits to 91,214 beneficiaries, compared to N6.31 billion disbursed to 2,896 beneficiaries in the same period in 2011.

He further said that the industry responded to the housing needs of pensioners by treating 649 applications and approving N7.89 billion payment for equity contributions towards residential mortgages

According to him, the Asset Under Management for the pension industry as of the period amounted to N17.35 trillion.

Mr Agudah said the figure reflected a compound annual growth rate of 20.32 per cent since 2007 when the AUM stood at N815.18 billion.

He explained that the contributions from the public and private sectors had increased, reaching N9.37 trillion in the second quarter of 2023.

This, he said, represented a 54 per cent rise, noting that the PFAs had invested N7.98 trillion, resulting in a 46 per cent investment return.

He noted that the pension fund was doing a lot in infrastructure, equity market and corporate debt securities.

The PenOp boss said since its establishment in 2004, the pension industry had been subject to robust regulation and protection, ensuring transparency and accountability within the scheme.

These measures, he maintained, had contributed to the industry’s success in safeguarding pension funds and providing retirees with reliable income streams.

“The pension industry in Nigeria has recorded enormous transformation and progress in the last 20 years,” he said.

In his remarks, Head, Surveillance Department, National Pension Commission, Dr Ehimeme Ohioma, said that adequacy and sustainability were the two keys critical to the success of the pension industry.

“Monthly pension must be adequate enough to sustain the pensioners after retirement for a long period of time. We must also ensure that the pension fund earns a good return on investment and the RoI is above the inflation rate,” he said.

Mr Ohioma noted that the pension scheme had come to stay and could not be reversed because the industry players had maintained a high standard over time to sustain the successes achieved.

He stated that in 2024, the industry would improve on its service delivery, upgrade the skills of its professionals and invest the pension fund on more secured investment portfolios.

Following inefficiencies of the Nigerian pension system, under the Defunct Benefits Scheme, the Federal Government under the leadership of former President Olusegun Obasanjo, introduced the Pension Reform Act (PRA) of 2004.

The Act became necessary to ensure that uniform regulations and standards apply to the administration of retirement benefits for the private and public sectors to ensure that individuals save towards catering for their old age.

(NAN)