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By Uwaifor Oga (FB Wall)
All of us will get old one day…..in few years to come it will be our turn!
The current pension manipulations should be stopped by Nigerians now!
I was very happy when the Senate recently made a move to amend the Pensions Act to enable Nigerians withdraw up to 75% of their cumulative savings,but what we really need is 100% if a retiree so wish. The law could also give pensioners the liberty to either withdraw their total sum or give the Pension Administrators the kind of investments they want with their hard earned funds
After attaining sixty years of age or spending thirty five years of active service to your nation, gathering all types of experiences finance, administration etc. PFAs still term you as novice; you don’t know how to handle your hard earned entitlements!
I will make a simple illustration here:
MR. A retires at sixty and has =N=20m as his savings. He accesses 50% of =N=20m which equals =N=10m. The balance =N=10m is to be spread over 180 months (15years) and MR. A earns =N=55,555 monthly for 15years and he stops earning anything because he is expected to die at 75.
If MR. A will be allowed to have his total sum of =N=20m, ceteris paribus (all things being equal), he could invest in the Money Market or Government Treasure Bills. Currently and authoritatively =N=20m can fetch up to 15%pa on a span of four consecutive 90 days tenor.
Meaning =N=20m gives about =N=3m per annum. Divide =N=3m by 12 gives MR. A, a monthly earning of =N=246,575 without depleting his capital of =N=20m
Why have we been quiet? Nigerians should wake up from this very deep slumber. The sum given to an average pensioner is not up to the interest the Administrators make on his/her savings. This manipulation/exploitation made PFA among the most lucrative businesses in Nigeria currently.
The National Assembly should save the Nigerian elders now!
