The multi-fund investment structure in the pension industry, taking effect from July 1, 2018, resonated at a pre-retirement seminar organized by Stanbic IBTC Pension Managers Limited in Lagos, during which the leading Pension Fund Administrator (PFA) provided deeper insights on the workings of the scheme.
Eric Fajemisin, Chief Executive, Stanbic IBTC Pension Managers Limited, speaking at the event on Thursday June 28, 2018, stated that the new structure replaces the previous “one-size-fits-all” arrangement that puts all active contributors into one Retirement Savings Account (RSA) Fund for purposes of investment.
He said the new structure would resolve the challenge of asset-liability risk management faced by the operators. By aligning the age and risk profile of RSA holders to match the four funds under the scheme, contributors would have a better chance to earn improved returns on their investments in proportion to their risk appetites.
The different categories of the multi-funds structure are Fund 1, Fund 2, Fund 3 and Fund 4. Fund I is targeted at people of 49 years and below who in the quest for higher returns are willing to take more risks. Fund 2 is aimed at people who are aged 49 years and below and still working but are satisfied with moderate returns and levels of risks. Fund 3 targets people 50 years and above but still working and have very low risk appetite. In Fund 4 are retirees who have the lowest risk profile of all categories.
Fajemisin said even though an individual may be retired, his/her money should continue to work for the person. As today’s people live much longer and enjoy healthier lives, meaning that the time spent in retirement is much longer, there is the need to plan for a comfortable life in retirement.
Planning for retirement, he said, should commence from the first day an individual starts working. This decision may seem disheartening at the onset, but with the help of an experienced pension professional, the process is made easy. As retirement approaches, the individual will not encounter the usual apprehension associated with retirement from work.
As people head towards retirement, a decision about the type of life they wish to live in retirement should not be made from the hip, but rather through a well-structured financial planning process. The process, he said, should commence from the day one takes on a first job and involves setting aside part of current income into a retirement savings account.
The Stanbic IBTC helmsman outlined three crucial considerations which everyone must give a thought to for a secured future. The first is that since no one will care more about another individual’s retirement investments, the individual should educate himself about the process. The second thought is that when making retirement investments, the assistance of a professional should be sought. The third thought is even when the individual may have stopped working for money; the money should never stop working hard for him.
“This seminar, besides celebrating all of you that will soon transit from contributors to retired clients of Stanbic IBTC Pension Managers Limited, also provides an opportunity to address the concerns or anxieties you might have as retirement draws close,” he said, Other issues that were examined include preparation for retirement; accessing retirement benefits; health at retirement and investment opportunities post-retirement.
The pre-retirement forum, which the firm launched four years ago, is part of initiatives aimed at encouraging retirement planning amongst Nigerian workers and employers. The event had over 700 participants in attendance. A similar session has held in Port Harcourt while another is scheduled for, Abuja and other cities this year.
Head, Business Development, Stanbic IBTC Pension Managers Limited, Nike Bajomo, assured that the company remains committed to rendering impeccable service to its clientele. “We make a promise to our clients: that they will retire very well. It is a promise we always keep. That explains why we are represented in virtually every part of Nigeria. Retirement is a time to rest and enjoy the fruits of your labour.
At Stanbic Bank Pension Managers, we help you to achieve just that,” said Bajomo. Stanbic IBTC Pension Managers Limited, she added, has over 1.6 million RSA holders nationwide, with assets under management in excess of N2 trillion. It pays approximately N1.3 billion to over 37,000 retirees monthly and over N279 billion has been paid to retirees since the PFA commenced operations in 2006, Bajomo added.
