Mr. Wilson Ideva is the Managing Director, Premium Pensions Limited. In this interview with Ebere Nwoji, he spoke on the role pension assets can play in rescuing Nigeria from the current economic recession, among other issues. Excerpts:
Nigeria is officially said to be in a state of economic recession. At a time like this, when America was facing its own recession, it was able to use its pension assets to come out of it, why can’t the pension assets be used to revive the Nigerian economy as done in other climes?
If you know the value of pension assets in the United States(US) compared to what we have here, there is a huge difference. We have not really started. The pension industry in US has been there for years. Over 50 years, 100 years and the assets of the biggest pension fund administrator (PFA) in the world which is the Carlifonia PFA if I remember, is more than about two three countries put together in Africa. So their assets are big enough.
But what we have is not big enough to take us out of what we are in today, but it can play a role and the role it can play is that it can help to fast track infrastructure deficit in this country and that is why we are talking about how we can use pension fund to intervene in terms of infrastructure. We are looking up to a situation where every Nigerian that has RSA can have a house. I keep telling people that you don’t need to have a house where the Tony Elumelus, Dangotes and Otedolas of this world have houses. But you can also have a house. So, we are looking up to that period and pension assets can play a major role on that. I think they are working on that and you will see it happen.
We also want government to see how it can partner the regulator and PFAs on infrastructure because the greatest challenge we have in this country is infrastructure. Let’s take road for instance, driving from Abuja to Lagos is a night mare. You know you can bring toll roads into this country and see how you can work together, I mean the PFAs, how they can invest into such toll roads, it will be a win-win situation for everybody. This is necessary because when you are driving on the toll roads, you are having a smooth ride and because we collect toll, we grow our assets and have returns for the money invested. So we are looking at how it will work and everybody knows what to do. There have been a lot of discussions between the minister of power, works and housing, and PenCom on that and we are expecting a blue -print soon. We are just players and once we have the guidelines, we begin to invest.
So we want to invest. That is why am not one of the proponents that pension funds should be invested outside Africa. We have not helped our countries and we are talking of outside investments. We need roads. I travel by roads I am a road person and whenever I travel, I feel like weeping because of deplorable state of our roads. What about the hostel development. Have you been to a typical Nigerian University hostels, do you see how our children sleep. Have you seen the kind of hostels there? can any one of us sleep in those hostels. I have been to hostels over the world, I sleep in some of them most times ,even at my level.
So we want that to be replicated and it can be done. That is why we said we have to build an industry because what we are dealing with is people’s long term savings. But we also cannot gamble with the money. We have to be sure where we are investing the money. Because the least that can happen is this, if I have saved N5.00 when I retire, let me have back my N5.00 you cannot say because you invested in infrastructure, you contributed N5.00 now I have N2.00 for you, nobody can take that from you. People talk about pension asset as if it is one government money lying somewhere. It is not. These are people’s money, your money, my money and if it is possible, we can line people up and share the money among them.
So the owners are known, so it is not government provision. We are only holding the money on trust for them and we cannot bridge the trust but we must pay them as and when due. That is the way we see it and it is in our best interest as PFAs to intervene, we are waiting for the blue print and once it is out, we will intervene. But be rest assured that we want to be sure of the safety of your funds. We don’t want to put money in one government project and tomorrow the policy is changed and when you come to me with your walking stick, I begin to tell you stories. I will not sleep.
Government has over N20 billion outstanding Pension Accrued Rights to pay to PenCom for onward transfer and link to workers’ savings account, what is your advice to government on this?
You know we are passing through challenge and PenCom is discussing with government on this. But all they could do is to raise bonds specifically on this to ensure people retiring are paid and that we don’t go back the way we were before when people were queuing up for their benefits. I am sure they know what to do. The Minister of Finance, Mrs. Kemi Adeosun, is well educated. She is intelligent so she knows what to do. What we are saying is our humble advice. Government is already doing something.
With the current rate of growth of pension sub- sector in Nigeria especially since the regime of Contributory Pension Scheme, can you paint a picture of what you think the industry will look like in the next five years?
The future for the industry is quite rosy because awareness is created on daily basis. When we started, people were not worried about their return on investment. There was nothing distinguishing pension fund administrators, they were like the same, but in the last two to three years, they are beginning to distinguish themselves. Even within the industry, we know people that can pride themselves on quality service delivery. We know people, who can pride themselves on information and communications technology, we know people who can pride on timeliness of services.
So, in the next five years, there is going to be much awareness. Looking at where we are coming from, the history of pension industry in Nigeria, people did not give it the chance to succeed. People thought it was one of those government things that would come and fade away. But people are now seeing the difference as confirmed by former President Olusegun Obasanjo. People are surprised that despite all the challenges we have in the country, the pension industry stands out. With that alone, people are going to start giving attention to the pension industry. Retirement saving holders are going to be demanding for services in the next five years, people are going to be looking at the returns on their investment, they will be looking at their remittances and ask their employers if they have remitted their contributions. This is because it is a collective action. If your employer deducts your money and he did not remit as at when due, you are losing value for your money.
So, that awareness will be created among the retirement savings account holders and in the next five years, there will be more demands from pension fund administrators on service delivery and getting things done better. We are also going to see a huge growth in the industry in the next five years. This is because our regulator, the National Pension Commission, has done great work in terms of bringing financial inclusion among the non-participants for now. We believe that in the next five years, we are going to see a growth that would be quite geometrical. I see enrollment rising to between 15 million to 20 million. I see assets under-management growing to over N20 trillion. I know that starting an event is quite more difficult than climbing up.
The plane has taken off in terms of the pension industry, we are not yet at cruise level, but we are almost getting to that. By the next five years, we may get to cruise level. At the cruise level, we might see a N20 trillion assets under management of pension industry. We might come close to 15 million enrollment in the industry, we might see the use of information communications technology in the next five years. A pension fund administrator that wants to be competitive and want to play in the next five years, that does not want to be left behind, should be thinking of information and communications technology.
What will happen is that, we are going to have a shift from what we have in employers’ schedules – employers remitting for you, to individuals making contributions through their phones. It has happened in Kenya and Ghana and it is going to happen here. Whether you like it or not, every Nigerian has a phone and knows how to use a phone. Every Nigerian would be very happy if their old age is assured and the only way you can be assured of your old age is through pension. So, I see information technology playing a major role in the next five years and that will be such that even in the villages, if you have air time of N1000, you can transfer N50 to your pension fund administrator and when you need the money, the pension fund administrator would transfer the money back to your phone.
Premium Pension, at the African pension award organised by PenCom during the World Pension Summit held recently in Abuja won two awards, how do you feel over the double awards and why do you think Premium Pensions deserved it?
First and foremost, let me give glory to God for the awards because it is not easy. You could have worked hard but what you are doing, people do not see it and do not appreciate it. But in our case, we thank God Almighty that our efforts are beginning to yield results. So, we are very grateful for what happened at the World Pension Summit, Africa Special. Because the event was an Africa initiative, all the pension fund administrators in Africa put together, Premium Pension was able to win two awards, and in two special categories, that really gives me a lot of excitement. One of the awards is for being the best in terms of corporate governance in term of pension fund administrator and the second was also for being the best in terms of pension fund administrator with wide coverage area. The two awards to us in Premium are very special.
Why do you think you deserve the awards?
Well, I will tell you that even entering from the gate of this company, you will see the difference between us and other pension fund administrators. The things we do are quite unique and different, how we do them are unique and different. We have a team spirit in Premium Pension, every person knows what he or she is expected to do and we are all doing that. We are not building individuals here, but structures because this is the greatest challenge we have in Africa.
Where you have a super managing director, when he leaves, the whole place collapses and when he is coming, every person is running around . That does not happen here. I am just first amongst equals, I see my team members as my mates and every morning I go to every person to greet them office by office, greet and thank them and to see the challenges they are having. That gives me a first-hand view of the challenges they are having and what is going on. In terms of corporate governance, here, you can find out from the staff, we pride ourselves, whatever is due to you get, things are well structured. We have structural way of doing things.
We do not wait until something happens before we can decide what to do. We know what to do in every situation. These are things we inherited and we are building upon and we are grateful to the founding fathers of this company. That had distinguished us and that was why we have been able to win the best pension fund administrator in corporate governance. In terms of wide coverage, last year, we decided to promote the industry, this is because we know that if the industry grows, the individual pension fund administrators will grow. I always tell my colleagues that it should not be the case of making an advert for their companies, though that is good, but it would not build the industry.
If we have a strong industry, we have robust industry, then individual pension fund administrators would grow. So, we started a campaign we called ‘A Reward for Hassle’. The campaign was deployed through the social media which has to do with the younger generation. The younger generation are not worried about pension, but how they can survive today. So, we decided to create awareness amongst the old and the young. The campaign took us round the federation and if you see the follower-ship on the various platforms – Facebook, Instagram and LinkedIn, it was well embraced.
In the campaign, we had prizes, star prizes and the campaign was not theoretical. The star prizes winners were here and they were presented with their prizes. The campaign created awareness for the pension industry. If you hear of enrollment of 7.2 million within the pension industry and contributions above N6 trillion, people would say we have done well, but if you compare that to the population and workforce, we are yet to start. With the campaign, we were able to reach people we need to help plan their future through pension. The campaign cost the company so much, but the emphasis was not on Premium Pension, but on the pension industry. We encouraged people to enroll and the campaign had paid off.
We also understand that we are in a rated business which we must put a face to. In the past three years, we have established 25 branches, you know what it takes to establish a branch in the country today, where you provide a generator, security and almost everything. You are the local government of yourself. We have created structures that will help the business to jumpstart and that is what we have been doing. When you talk about coverage, there is no location in this country where you cannot find Premium Pension. Even during the difficult times in the North East, we were in Borno, our staff were in Maiduguri, Yobe, Yola and Gombe and they remained there. Today, despite the militancy in the Niger Delta, we are there. There is no state capital that you cannot see installation of Premium Pension. That is our measure of coverage and how we see the industry. That is why we are not surprised that we won the award.
People are talking of electronic age, yes, we believe in it, but also we have clientele that are having challenge with electronic age and these people we must carter for. They want to have a one to one discussion with a customer service officer, they want to have a place they can come and discuss with you about their pension, whether you like it or not, after your doctor, the next officer you should have a discussion with is your pension fund administrator.
That is the message we have been sending out to the public. Most Nigerians do not look at their statements. We do not know whether our pension fund administrators are making fair returns, above inflation rate return or real return which is above inflation. People do not care, but we have a duty as practitioners in the industry to enlighten people, create pension education so that people would be aware. If they are aware, it would generate a lot of interest in the industry, so that is what we are doing, and I think that had stood us out and we are not relenting because we know that the reward for hard work is more work. We know that the challenge is going to be more fierce among our colleagues. We are ahead of the curve, we know where we are going. People have not seen anything yet, we are very determined. We do not want to be benchmarked with a Nigerian company.
I must confess, we pride ourselves as international company with best practices, so we want to be benchmarked with the best companies anywhere in the world. And we must be seen as such in terms of our staffing, physical outlook in our offices, service delivery and information and communications technology platforms. What we have here in our head office is replicated everywhere in the country in a small version. If you go to our offices in Awolowo Road Ikoyi, Lagos, Benin, Port Harcourt and Enugu, Yola, what you see is a replica of what we have here. Whether it is the furniture or outlook, they are the same. If you are building a brand, it must be the same anywhere you are. That is what we are trying to do and it is what is standing us out. And that is why we think we are being recognised.
How do you think these awards can impact on your clients?
The awards are a measure of confidence to our retirement saving account holders that the world has bestowed on us. It gives them further assurances of what we are doing here. That their funds are not only safe, but in the best hands. In terms of return on investment, we have a mandate to return fair return to our RSA holders. We pledged to remain so for a foreseeable future.
For our retirees, we have received a lot of text messages and emails from our retirees, saying that they are being paid earlier than when they were working. Our retirees’ payment date is on the 19th of every month. We also make return on their balances. There was a retiree, who approached me some days ago, saying that he has retired five years ago, but his balance has not decreased. I told him that the balance is not decreasing because we are investing his money. We are giving them further assurances that we will do more. When you get an award, they are telling you simply that they want more hard work from you. We are not going to relent on what we have done. They are only going to see a better Premium, they are going to see hard working Premium. We work as a team here. That is what distinguishes us. If you walk into this place, you would see that our drivers are unique, security men are unique, so also our marketers and field officers. I would also say that I am a unique managing Director.
I am a unique managing director because I leave by example. I am here as early as I can by 8 o’clock. I drive myself and observe my break just like any member of my staff. We have a canteen here, I go to the canteen and eat with my staff. I also close when people close. We are quite unique here and our DNA is that we do not benchmark ourselves with what is happening around us but what is happening in the world. We would not be carried away by the awards, we are going to ensure that we work harder than what we are doing. There is actually a philosophy that underpin our operations. We do not look at pension as a business, we look at it as a social security. If you look at it from that perspective, that is the passion that drives everything that we do.
You said you pay your retirees on the 19th of every month, how do you achieve that?
It was a collective decision by the entire workforce . We (staff) are paid on the 24th of every month. We then agreed to allow our retirees to be paid before we are paid. So, if the last retiree is not paid, we would not get paid. Which means that if a retiree has wrong account, we need to sort it out. The staff agreed that our retirees should be paid on the 19th so that all issues with retirees are sorted out, because if it is not sorted out, their payment would get to the 27th day of the month. If they do not want their salaries on the 27th, and they want it on 24, they have to sort out that of the retirees. Before the awards came, we were the first pension fund administrator that got ISO certification. There was no requirement from PenCom for us to do that. We just felt we should not benchmark ourselves with local standard that we should benchmark with the best in the world.
What has your firm done concerning those not presently captured in the scheme?
On the informal sector, we have done a lot of awareness creation. Note that everything we do in this industry has to be backed by guidelines. There is yet to be guidelines for the take-off of the micro pension. PenCom has asked us to give our inputs, which we have made. They are going to come back to us. When the guideline is issued, every operator will key into it.