ABUJA – The Financial Planner, Leadway Assurance Company, Mr Fatoye Paul on Friday in Abuja said 80 per cent of retirees in the country made wrong choice of pension plan.
Paul made the assertion in an interview with the News Agency of Nigeria (NAN) on the sidelines of the “Verification and Enrolment for Federal Government Employees Due for Retirement in 2015”.
Paul said that majority of the retirees go for programmed withdrawal as their pension on retirement because they were unaware of other plans available.
He explained that there were a lot of insurance companies present at the exercise to enlighten prospective retirees about the retirement plans available to them.
He decried the unpopularity of the annuity plan, which is a type of life insurance package for retirees in spite of all publicity being done in that regard.
“Majority of prospective retirees are still unaware of the options available to them at retirement. We are here to let them know that there are three options.
“According to the Pension Reform Act 2004, Section 4, there is the option of monthly or quarterly withdrawal on the basis of an expected life span.
“The second option is annuity for life, purchased from a life insurance company, licence by NAICOM.
“And lastly, we have the lump sum withdrawal of not more than 50 per cent of total retirement savings out of which the rest will be either programmed withdrawal or annuity,” he said.
Paul urged prospective retirees to opt for the annuity because it is a good retirement plan that pays higher than the other options of programmed withdrawal.
He told NAN that for annuity, the pay is for life, no matter the number of years the retiree lives.
He explained that in annuity, if a retiree dies within a guaranteed period, their beneficiaries would be paid the balance of their lump sum by the insurance company.
Similarly, a Benefit Administrator from Legacy Pension, Mrs Blessing Anieze, told NAN that the programmed withdrawal was handled by the Pension Fund Administrators (PFAs) and Annuity by insurance companies.
“The PFAs are known mostly by everyone and these retirees don’t really know about us.
“It is like the PFAs have overshadowed the system and people don’t know about the annuity plan.
“And annuity is a very good retirement package. It takes care of the elders in our societies no matter how long they live.
“These people cannot work again because of their age. Some don’t have business abilities after working so long for the government,” she said.
NAN reports that the exercise was organised by the National Pension Commission which started since June 9, and is expected to end on June 13 at the Women Development Centre, Abuja. (NAN)
