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Retirement Planning And The Challenges Faced In Nigeria

Retirement Planning

Retirement planning in our present world does not need much introduction. Almost everyone is familiar with it. You hear kids ask why grandpa isn’t going to work like daddy and the response is: “Grandpa is retired.” The youths up and coming on the corporate ladder are not left out here. They always have encounters with pension marketers who bombard them with their products.

Retirement planning is now a topic that hounds one every day and we have the media most to thank for it. Who can forget the popular comical advert featuring a man eating garri (eba) with over ten pieces of meat on his plate, and was asked if he wants to eat away his future in the present? From that advert, it is easy to deduce that retirement planning is keeping a part of one’s present income for future use at old age. Nowadays, retirement sounds like a good word but in the last decade, it wasn’t. It was a period most workers dreaded most, especially the public employees.

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In reality, nothing can guarantee a wonderful retirement. It depends on many factors: lifestyle, expenditure pattern, a country’s economic situation, responsibilities, and target retirement age. It is always best to start early than later and imbibe a consistent saving habit. Because human wants are insatiable, it will be almost impossible to save without discipline. This is why there are organisations that help in retirement planning. They are called pension administrators or pension managers. There are also retirement web tools in form of calculators that are available online which will guide you if you wish to plan your retirement yourself.

For the public sector workers, the state and federal governments take charge of pension matters. Throughout an employee’s active years, a set percentage of their salary is set aside regularly, making up, in the end, their retirement portfolio. These funds are made available to the employee when they retire. It is supposed to be a joyful experience and something to look forward to in having access to all the money set aside over the years.

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Retirement Planning And Challenges Faced In Nigeria

However, corruption has plagued the Nigerian government for many decades, affecting even the pension management run by the government. The process has been so corrupted that employees’ pensions are among the most vulnerable and accessible funds to embezzle. So when the time comes to pay the employees, unimaginably long queues surface, and several oga-is-not on-seat-come-tomorrow or your-documents-are-not-complete type excuses are given.  These are all in a bid to discourage the retirees from pursuing their pensions because the funds to pay them are simply not available.

The stress, disappointment, heartache, lack of money, and dashed hopes caused by the process have caused deaths to some as most of the retirees are in their late 80s. These issues dent the image of the country.  It hampers the influx of foreign investments and generates a disinterest in the young joining the public service.

In order to combat these challenges, the government has continuously promoted and encouraged the influx of independent private pension managers to ensure convenience in the system and assure the future of employees. The government has even gone ahead to pass a law that penalises any individual that mismanages or embezzles pension funds. According to the Pension Reform Bill of 2014 signed by the former President Goodluck Jonathan, the person would be jailed for ten years.

Presently, organisations that have at least ten employees are required by law to register with a pension manager. The process entails the employees contributing 8% of their income and employers contributing 10%. These contributions are tax allowable deductions for both the individual and the company. This way, the government encourages employees to participate in the process and have an adequate retirement plan.

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In conclusion, the government has taken it upon itself to regulate pension fund administration in the country. It has improved its vigilance on the operations of pension fund managers by ensuring they submit interim operational reports and that their interest rates are moderate. The body language of the government in recent times has renewed confidence in Nigerians, foreigners, indigenous companies, and foreign ones alike.  So we should be encouraged to save for our future. It is good advice to start early putting away or investing funds to be used in rainy days. Indeed, if possible, have an investment or business on the side that you can retire to too.

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