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Insurance Expert Decries Poor Understanding of CPS By Labour Unions
The Managing Director and Chief Executive Officer, IEI-Anchor Pension Managers Ltd, Mr. Glory Etaduovie, has decried the huge gap in understanding the workings of the Contributory Pension Scheme(CPS) especially among labour unions and state government workers.
Etaduovie, also faulted the reports that states that adopted the CPS are failing like Kaduna and Niger, insisting that the information is clearly not true because there are facts about the success of the schemes in states.
In a statement made available to THISDAY, Etaduovie said: “The mix-up is coming from the challenges of transition from the old scheme to the new one. This is especially so for those caught in between of both schemes. This will disappear with time. There is also the challenge of remittances from the governments, which is not uncommon with the defined benefits scheme. This has nothing to do with the CPS,” he clarified.
He highlighted some of the attitudes of retirees that depict their lack of understanding of the workings of the scheme, saying that some retirees were agitating for and preferring full payments of their pensions. This he said, negates the pensions idea of a steady and regular income for the period of reduced energy to engage in serious business adventure.
According to him, some retirees also agitate for use of their money to finish their unfinished accommodations cautioning that though these are likely future innovations they should be carefully handled because it will be bad for them to have their buildings with empty retirement accounts.
The IEI-Anchor Pension boss, noted that the bad experiences with the Defined Benefit Scheme; the syndicated looting of the fund; the long and horrible annual verification of retirees and the long processing and wait for payment of benefits after long retirement were no doubt painful experiences to both retirees and their children and have contributed to their lack of understanding and fear of the CPS.
He however, said Nigerians cannot remain in the past on pension issues.
“It is not news that the burden of pension payment on the government is increasing and its power to continue paying in the dwindling world and local economies is becoming not only impossible to carry, but no longer in vogue”, he added.
He observed that all governments, world over are unburdening themselves in matters of public utilities, health management (as in the Obamacare health plan or our HMOs) while others are seeking for public private partnerships both to manage costs, efficiency and effectiveness and that Nigeria cannot be different.
He advised the agitators that rather than stay afar off the CPS scheme to criticise it and throw stones at it, the labor leaders should get think a thank team(s) to fully understand its strength for critical advise.
Furthermore, he observed: “Change is constant. The world has globalised. Delays, as we have done in imbibing ICT and other technological progress and attitudes leave trailing as always and compounding our economic challenges.
“Their complaints that the CPS has smaller terminal benefits and pension may be so, but the reality is that the old scheme is no longer sustainable. The government cannot continue on that basis. It would pile up Pensions debts further compounding present positions.”
He said the investment style of the CPS scheme benefits all, maintaining that it grows the scheme on compound interest basis annually.