A new NOI Polls has revealed that 6 in 10 Nigerians (some 64 per cent) do not have pension plans, indicating that most Nigerians are not making plans for retirement and that the pensions market in Nigeria is largely untapped.
According to NOI Polls which is the No. 1 for country-specific polling services in the West African region, more than half of the Nigerians who currently have pension plans (54% of 36%) are subscribed to the contributory pension schemes for public organisations.
It was also revealed that majority of Nigerians who have pension plans (73% of 36%) are satisfied with their current Pension Fund Administrators (PFAs); while those who claimed not to be satisfied (27% of 36%) attributed the lack of satisfaction to the non-receipt of updates on their pension accounts.
The opinion poll was conducted from September 2nd to 4th 2013. It involved telephone interviews of a random nationwide sample.
1018 randomly selected phone-owning Nigerians aged 18 years and above, representing the six geopolitical zones in the country, were interviewed.
With a sample of this size, we can say with 95% confidence that the results obtained are statistically precise – within a range of plus or minus 3%.
Similarly, for those who do not have any pension plans, the major reasons cited are: “I am a student” (22%), “I don’t have a job” (21%) and “I don’t know much about pensions” (13%). These are the key findings from the Pension Snap Poll conducted in the week of September 2nd, 2013.
The Pension Reform Act 2004 enacted by the National Assembly of the Federal Republic of Nigeria Establishes a contributory pension scheme for employees in public and private sectors.
The scheme is fully funded, privately managed with a third party in custody of the funds and assets and based on individual accounts. It ensures that everyone who has worked receives his/her retirement benefits as and when due whether in the private or public sector.
With the contributory scheme, an employee and employer makes monthly contributions of a minimum of 7.5% each of the monthly emoluments of the employee towards the retirement benefits of the employee. However in some cases, an employer can make all the contributions on behalf of the employee.
The old pension schemes in Nigeria were not fully funded and this caused great problems in the management of retirement funds.
The implementation of the contributory pension scheme introduced by the Pension Reform Act 2004 has addressed such problems to a certain extent; nevertheless it is not enough for Nigerians to be totally dependent on the scheme.
In view of this, Personal pension, which is not common in Nigeria, is an area that can be explored to augment the contributory pension. Individuals regardless of their employment status could choose to save or invest money in order to make provisions for them at retirement.
In view of these, NOI Polls conducted its latest poll on Pension to explore the current state of Pension in Nigeria, in terms of the proportion of Nigerians that have pension plans, the type of pension plans people subscribe to and the level of satisfaction with Pension Fund Administrators.
Respondents to the poll were asked five specific questions. Firstly, in order to ascertain the proportion of Nigerians that have pension plans, respondents were asked: Currently, do you have a pension plan? Findings from this question revealed that overall Majority (64%) of Nigerians do not have a pension plan, while 36% indicated they have pension plans.
Analysis based on geo-political zone showed that the South-East and the North-West zones had the highest proportion of Nigerians without pension plans with 68% and 67% respectively; and the South-West zone (41%) accounted for the highest proportion of respondents that have pension plans.
Secondly, in order to gauge the type of pension plans Nigerians have, respondents that indicted they have pension plans (36% of the total) were asked: What type of pension scheme do you have?
Overall, more than half of Nigerians who currently have pension plans (54% of 36%) are subscribed to the contributory pension scheme for public organisations.
While 35% have the contributory pension scheme for private organisations, it also emerged true that 11% obtain their own personal pension independently.
From the geo-political zone standpoint, the South-East (76%) and the North-Central (73%) zones accounted for the highest proportion of respondents that indicated public organisation pension scheme. Also the South-South (52%) and the South-West (50%) zones had the highest proportion of respondents that indicated Private pension scheme, while the North-East (42%) zone had the highest number of people who have personal pension plans, among other findings.