Monday, May 18, 2015/ By Ebere Nwoji/ Thisday
The total pension funds currently accumulated in the country stand at N4.7 trillion as at December 2014, Chairman of Premium Pension Limited, Aliyu Dikko has said.
This figure, according to him, represents an increase of N0.6 trillion from the N4.1 trillion in 2013.
The current figure was contributed by 6.5 million workers who have enrolled into the contributory Pension scheme (CPS) as at December 2014, an increase of 0.4 million contributors against the previous year's figure of 6.1 million contributors.
Disclosing this at the 10th Annual General Meeting of his company held in Abuja, Dikko, whose company is one of the licensed Pension Fund Administrators said the above improvements shown by the figures was an indicative of the fact that the teething challenges of the pension industry had been surmounted and the initial skepticism trailing the operations of the contributory Pension Scheme drastically reduced.
"The CPS is today arguably the most successful government initiative in recent times and a clear testimony to the effectiveness of private-sector-driven rendition of service in critical sectors", he stated.
He noted that the year 2014 marked 10 years of the introduction of the Contributory Pension Scheme (CPS) in the country, adding that the year also witnessed the promulgation of the Pension Reform Act 2014, which repealed the Pension Reform Act, 2004.
He noted that the new act effected a lot of relevant changes into the pension scheme.
"This new legal instrument guiding the pension industry has among other provisions graciously increased the total minimum contributions from 15per cent to 18per cent of the employee’s emolument, provide basis for extending the scheme to organisations having as less as three employees, allow RSA holders to utilise part of their balance as equity contributions for mortgage facilities and expanded the investment space by providing legal framework for investment abroad.
Describing the new law as a great opportunity waiting to be tapped by the industry operators, Dikko said though operators including his company Premium pension are strategising towards optimising the benefits, more work still has to be done in the area of public enlightenment on the workings of the industry and the immense advantages accruable from enrolling in the scheme.
He noted that the pension industry is currently moving towards reckoning as a critical sector of the economy and a major player in national development adding that this is as a result of professionalism, dedication and commitment of the operators.
"Our company is now firmly rooted in an industry that has come to stay.
Credit must also be given to the National Pension Commission (PenCom) for its effectiveness as the regulatory body of the industry. It contributed in no small measure in seeing to the promulgation of the Pension Reform Act 2014. The agency is driving the process of actualising the promises and potentials of the new legal instrument. PenCom deserves a great measure of credit for the tremendous successes recorded in the industry in the past decade. From all indications, the agency is even poised to do more," he affirmed.
Speaking on the state of the economy,Dikko said that Standard and Poors credit rating for Nigeria stands at BB- while Moodys rating for Nigeria sovereign debt is Ba3.
He added that Fitchs rated Nigeria BB-expressing hope that with the general elections in the country concluded peacefully and with the prospect of the incoming government targeting reforms at critical sectors of the economy, fundamental positive changes are anticipated to turn around the economy.
According to him, for the pension sub sector, it is expected that the pension industry would witness a major boost if the above reforms are well pursued and implemented.
According to the Premium Pension boss, key to the growth of the pension industry is employment generation.
He however said the sustenance of the industry required creation of additional permissible investment instruments that accommodate initiatives for national development adding that this includes investment in the real sector as well as infrastructural development without compromising the ultimate objective of ensuring the safety of pension assets.
He spoke on the performance of premium pension during the year saying that the company had maintained its enviable position as one of the leading PFAs in Nigeria.
He said despite the declining employment opportunities that had negatively impacted on the company's business generation drives, premium pension has expanded its horizon in terms of funds under management and number of Retirement Savings Accounts.
"As at December,2014 the company has several Funds Under Management (FUM), namely; Active RSA fund, Retiree RSA fund, CBN active and CBN Retiree fund, NNPC 1 & 2 fund UBN fund, SEC fund and FBN fund.
"Other funds under our company’s management include Jigawa State fund, NDIC fund, Intercontinental fund, Lagos Chanel Mgt fund, Rivers State fund as well as Niger state Legacy fund.”
He also said that the company had maintained robust relationship with existing institutional clients and is tirelessly working towards establishing new relationships.
Speaking on the performance of the company during the year under review,, the Premium Pension boss stated that the assets and income for the company witnessed significant growth during the year despite stiff competition and macroeconomic instability.
"I am therefore happy to inform you that our growth has continued to translate into very good returns for our RSA holders.
"The number of RSAs registered by our company both in the public and private sector organisations increased from 613,449 as at December, 2013 to 662,628 in 2014.
"Out of the total RSAs, 514,446 were funded while 148,162 were still being persuaded for funding.
"The consolidated portfolio as at December 31, 2014 had a net asset value of N367.768 billion as against N323.427 billion that had been reported in December, 2013. This has resulted in a growth of 13.69 per cent. The RSA (active) fund which as at December 31, 2013 had a net asset value of N219.288 billion closed the year 2014 with N268.198 billion signifying a growth of 22.30per cent", he stated.
Continuing on the performance of the company during the year under review, Dikko said
"The RSA (retiree) fund that had N41.415 billion as at the end of the year 2013 recorded a decline of N1.144 billion or 2.76per cent to close the year with a net asset value of N40.271 billion. The legacy fund which had N62.770 billion in 2013 financial year decreased to N57.898 billion or a 7.76per cent decline in growth.
During the year under review, the turnover for the company grew from N4.226 billion in 2013 to N5.252 billion resulting in a growth of 24.28 per cent.
The Company's profit before tax grew from N2.351 billion in 2013 to N2.609 billion, signifying a growth of 10.97 per cent, while profit after tax grew from N1.625 billion to N1.766 billion or a growth of 8.68per cent.
According to him, the above impressive performance is a reflection of the various strategies the company had adopted and the commitment of the board, management and staff in ensuring that new businesses were won and existing customers well served through the delivery of superior customer service.
He said following the above performance,the boarding the company has is recommended a dividend of N2.00 (Two Naira) per share gross, subject to appropriate tax.