75% Lump Sum Payment On Retirement Will Make Pensioners Liability To Society – PenOp
The President, Pension Fund Operators Association of Nigeria (PenOp), Mr Wale Odutola has warned that paying pensioners 75 % lump sum on retirement will make them have nothing to fall back on and consequently make them liability to society.
Odutola sounded the warning following a bill currently being moved by some members of the house of representatives to increase the lump sum payable to retirees to at least 75 % of their Retirement Savings Account (RSA) .
“What would happen when large payouts are given to Retirees, is that they would not have any other fall back and ultimately, they may become a liability on the society. As a Nation, we need to forestall this possibility so that we give Retirees their dignity in retirement and reduce the possibility of their being a liability to society”, said Odutola.
He insisted that the argument that many people were suffering after retirement was wrong.
“The argument that many people are suffering, receiving pittance when they retire is flawed and faulty. What we need to realize is that the loudest voice is not necessarily the correct voice. We might all know of one person who had issues with accessing his pensions, however there are millions more who are perfectly happy with the structure CPS” he stated.
He suggested that employers should be encouraged to pay gratuities at retirement and/or increase their level of monthly contributions in order to boost the balances and subsequent pension payout of their staff.
Odutola called on need for Nigerians to be made to understand that pensions were not set out for people to be made wealthy.
“The other point we would like to make is that pensions are not set out to make you wealthy. If you were wealthy while working, a healthy savings, like a pension, will make you wealthier. Thus, pension will make you comfortable in retirement”, said PenOp boss.
He further advocated that Nigeria should borrow a leaf from the international communities.
“Another pertinent point, is that Nigeria needs to toe the line of international norms and standards. In other countries with developed systems, lump sum payments are highly regulated and restricted.
In his contribution, the PenOp CEO, Mr Agada Oguche who said PenOp strongly oppose the bill assured that CPS was working for millions of Nigerians adding that Nigerians should not construe the loud cry of a few as the verdict of the many.
He insisted that scheme should not be cannibalized because there were some issues, rather it should be strengthened for the benefit of all.