Pensioners under the Contributory Pension Scheme (CPS) are excited over the return on their savings.
Under the Pension Reform Act 2014, they are referred to as Retirement Savings Account (RSA) holders.
An RSA, who simply identified himself as Korede, said despite withdrawing 25 per cent of his pension after he lost his job last September, his pension fund administrator (PFA) has almost returned the money he withdrew 10 months after.
“I received 25 per cent of my pension balance in September last year from my PFA. Before I lost my job, I had N5.8 million as my pension balance. I received N1.37 million in September and my balance went down to N4.4 million,” he said.
“To my greatest surprise, in an SMS sent to me by my PFA for June this year balance showed that my pension had grown to N4.7 million in just 10 months. This showed that my pension balance has increased by N300,000 representing a 6.8 per cent growth.”
“I am amazed at this increase in my balance because I don’t think any bank in Nigeria today can pay me N300,000 as interest on N4.4 million in 10 months.”
Another RSA Holder, Francis, who lost his job three years ago, said he was paid N730, 000 as 25 per cent of his pension balance, but the amount in his balance has grown to N500, 000 as at June.
“I lost my job in February 2013 and had N2.93 million in my pension account. Six months after, I requested for 25 per cent of my balance from my PFA. I was paid N730, 000, thus I had N2.2 million as at August of the same year. I was surprised when I received SMS from my PFA that my pension balance is now N2.7 million.
“This means that my pension has grown by N500, 000 or 22.7 per cent in three years. It also means that my PFA has accumulated almost the 25 per cent that I received when I was out of job.’’
Mrs. Folashade, a civil servant with Lagos State public service, said her pension has been growing since she came under the CPS about 10 years ago.
She said she had worked for 25 years, but wished she had joined the scheme when she started work.
Reacting to the expressions of the RSAs, Head Customer Unit, Crusader Pension Ltd, Femi Odukoya, said it was no surprise that returns on pension savings were huge as stated by the RSAs.
“It simply goes to affirm the beauty of the new defined contributory scheme as enunciated in the PRA 2014 (as amended) and other regulations released by the National Pensions Commission (PenCom).
“The investments of the Funds are regulated by PenCom via an Investment Guidelines that details the assets classes, volume, ratings and others that PFAs could invest in. This is monitored by the Investment Monitoring Department of PenCom daily via electronic means.
“However, within the investment regulations, some PFAs do understand the market more than the others, so this makes the difference in the revenues earned in favour of the contributors.
Every PFA generates a daily price which is a function of how effectively it has invested the fund under its management. The fund price, ultimately, determines the value the owner gets at the point of the exit.
That is the efficient Fund Manager-PFA’s price would be the highest when compared to its peers. “So, the higher the fund price, the higher the amount the contributors gets at the point of exit.”
