Nigeria’s pension ranks on the 64th place in the world, especially because of the insufficient adequacy of its pension system, an Allianz Global PensionReport reveals.
The Country’s coverage of the pension system is still very low and limited access to financial services hampers the build-up of sufficient private old-age savings to cushion the lack of the public pension pillar.
With respect to sustainability, Nigeria ranks also in the bottom third. The harmonization of the retirement ages of the various professions and adjusting the retirement age in line with future gains in life expectancy would improve the long-term sustainability of the pension system further, the report further reveals.
Allianz weekend unveiled the first edition of its “Global PensionReport”, taking the pulse of pension systems around the world with its proprietary pension indicator, the Allianz Pension Indicator (API). The indicator follows a simple logic: It starts the analysis with the demograph-ic and fiscal prerequisites and then continues to examine pension systems along their two decisive dimensions: sustainability and adequacy. Hence, it is based on three pillars and takes all in all30 parameters into account, which are rated on a scale of 1 to 7, with 1 being the best grade. By adding up all weighted subtotals, the API assigns each of the analyzed 70 countries a grade between 1 and 7, thus providing a comprehensive view of the respective pension system.
“Demographics and pensions have been eclipsed by other policies in recent years, first and foremost climate change and today the fight against Covid-19”, said Ludovic Subran, chief economist of Allianz. “But you ignore demographics at your own peril, demographic change will soon be back with a vengeance. Defusing the looming pension crisis and preserving ge-nerational justness and equality arekey for building inclusive and resilient societies.”
