Retirement: 80% retirees opt for wrong pension plan — Expert

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–  The Financial Planner, Leadway Assurance Company, Mr Fatoye Paul on Friday in 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 Employees Due for in 2015”.

Paul said majority of the retirees go for programmed withdrawal as their pension on because they were unaware of plans available.

He explained there were a lot of companies present at the exercise to enlighten prospective retirees about the plans available to them.

He decried the unpopularity of the annuity plan, which is a type of life package for retirees in spite of all publicity being done in 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 company, licence by NAICOM.

“And lastly, we have the lump sum withdrawal of more than 50 per cent of 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 is a good retirement plan that pays higher than the 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 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 Administrators (PFAs) and Annuity by insurance companies.

“The PFAs are known mostly by everyone and these retirees don’t really know about us.

is like the PFAs have overshadowed the system and don’t know about the annuity plan.

“And annuity is a very good retirement package. takes care of the elders in our societies no matter how long they live.

“These 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, . (NAN)