Abuja, Nigeria. September 10th, 2013 – Latest weekly poll results released by NOIPolls has revealed thatmore than 6 in 10 Nigerians (64%) do not have pension plans, indicating a potentially huge untapped pensions market in Nigeria. Also more than half of the Nigerians who currently have pension plans (54% of 36%) are subscribed to the contributory pension schemes for public organisations. It was further revealed that majority of Nigerianswho have pension plans (73% of 36%) are satisfied with their current Pension Fund Administrators (PFAs); while those who claimed not to be satisfied (27% of 36%) attributed the lack of satisfaction to the non-receipt of updates on their pension accounts. Similarly, for those who do not have any pension plans, the major reasons cited are: “I am a student” (22%), “I don’t have a job” (21%) and “I don’t know much about pensions” (13%). These are the key findings from the Pension Snap Pollconducted in the week of September 2nd, 2013.
The Pension Reform Act 2004 enacted by the National Assembly of the Federal Republic of Nigeria Establishes a contributory pension scheme for employees in public and private sectors. The scheme is fully funded, privately managed with a third party in custody of the funds and assets and based on individual accounts. It ensures that everyone who has worked receives his/her retirement benefits as and when due whether in the private or public sector. With the contributory scheme, an employee and employer makes monthly contributions of a minimum of 7.5% each of the monthly emoluments of the employee towards the retirement benefits of the employee. However in some cases, an employer can make all the contributions on behalf of the employee.
The old pension schemes in Nigeria were not fully funded and this caused great problems in the management of retirement funds. The implementation of the contributory pension scheme introduced by the Pension Reform Act 2004 has addressed such problems to a certain extent; nevertheless it is not enough for Nigerians to be totally dependent on the scheme. In view of this, Personal pension, which is not common in Nigeria, is an area that can be explored to augment the contributory pension. Individuals regardless of their employment status could choose to save or invest money in order to make provisions for them at retirement.[1]
In view of these, NOIPolls conducted its latest poll on Pension to explore the current state of Pension in Nigeria, in terms of the proportion of Nigerians that have pension plans, the type of pension plans people subscribe to and the level of satisfaction with Pension Fund Administrators.
Respondents to the poll were asked five specific questions. Firstly, in order to ascertain the proportion of Nigerians that have pension plans, respondents were asked: Currently, do you have a pension plan?Findings from this question revealed that overall Majority (64%) of Nigerians do not have a pension plan, while36% indicated they have pension plans.
Analysis based on geo-political zone showed that the South-East and the North-West zones had the highest proportion of Nigerians without pension plans with 68% and 67% respectively; and the South-West zone (41%) accounted for the highest proportion of respondents that have pension plans.
[1] www.pencom.gov.ng
Secondly, in order to gauge the type of pension plans Nigerians have, respondents that indicted they have pension plans (36% of the total) were asked: What type of pension scheme do you have? Overall, more than half of Nigerians who currently have pension plans (54% of 36%) are subscribed to the contributory pension scheme for public organisations. While 35% have the contributory pension scheme for private organisations, it also emerged true that 11% obtain their own personal pension an independently.
From the geo-political zone standpoint, the South-East (76%) and the North-Central (73%) zones accounted for the highest proportion of respondents that indicated public organisation pension scheme. Also the South-South (52%) and the South-West (50%) zones had the highest proportion of respondents that indicated Private pension scheme, while the North-East (42%) zone had the highest number of people who have personal pension plans.
Thirdly, in order to measure the level of satisfaction derived from the services of pension fund administrators, respondents who currently have pension plans were asked: Are you currently satisfied with your current pension fund administrator? Overall, majority of Nigerians (73% of 36%) who have pension plans are satisfied with their current Pension Fund Administrators. Comparatively, 27% indicated lack of satisfaction for their pension fund administrators.
Gauging the satisfaction according to geo-political zones revealed that the South-West zone with 83% (which also had a high proportion of respondents with the private organisations contributory pension) accounted for the highest proportion of respondents that are satisfied with their Pension Fund Administrators. In addition, the North-West zone (54%) had the highest number of respondents that are not satisfied with their current Pension Fund Administrator.
Subsequently, respondents that indicated a lack of satisfaction for their Pension Fund Administrator (27%) were further asked: Why are you not satisfied with your current fund administrator? Findings revealed that the major reason for lack of satisfaction with the Pension Fund Administrator as indicated by (53%) is “No update on my account”. This is followed by “Don’t pay money as and when due” indicated by 23%. Other reasons identified with lack of satisfaction include “Poor customer service” indicated by 11%, “I don’t feel my money is secured with the PFA” indicated by 8% and “No remittance of money” indicated by5%.
Further analysis based on geo-political zones showed that while the North-West zone (84%)had the highest proportion of respondents that indicated “No update on my account”, theSouth-South zone (49%) had the highest number of respondents that indicated “Don’t pay money as and when due”.
Finally in order to explore the reasons why most Nigerians don’t have Pension, respondents that indicated they did not have pension plans in a previous question (64%) were asked: Why don’t you have pension plan? Findings revealed that the major reasons cited by respondents for not having pension plans include “I am a student” indicated by 22%, ”I don’t have a job” indicated by 21%, “I don’t know much about pension” indicated by 13% and “I am not interested” indicated by 12%. Other reasons cited include “I am self-employed” indicated by 9%, “I don’t have money’ specified by 7%, “I don’t need it for now” specified by 5%, “it is meant for civil servants”. Reasons that came at the bottom of the chart include “I work in a private firm” indicated by 3%, “I don’t trust the Pension Fund Administrators” indicated by 2%and “I will in the future” indicated by 1%.
In conclusion, the poll revealed that 6 in 10 Nigerians (64%) do not have pension plans and more than half of Nigerians who currently have pension plans (54% of 36%) are subscribed to the contributory pension scheme for public organisations. Findings also revealed that majority of Nigerians who have pension plans (73% of 36%) are satisfied with their current Pension Fund Administrators. Furthermore, the major reason for lack of satisfaction with the Pension Fund Administrator as indicated by majority (53%) is “No update on my account”. Findings revealed that the major reasons cited for not having a pension plan include “I am a student” indicated by 22%, ”I don’t have a job” by 21%. Finally, this poll has shown that there’s potentially a huge pension market for PFAs to harness in Nigeria. Therefore, they need to device new strategies and design new pensions products to harness this untapped market. Also, there’s need for increased enlightenment and education on the merits and benefits of pensions to individuals and the economy, particularly in terms of mobilising funds for investment.
Survey Methods The opinion poll was conducted from September 2nd to 4th 2013. It involved telephone interviews of a random nationwide sample. 1018 randomly selected phone-owning Nigerians aged 18 years and above, representing the six geopolitical zones in the country, were interviewed. With a sample of this size, we can say with 95% confidence that the results obtained are statistically precise – within a range of plus or minus 3%. NOIPolls Limited is theNo.1 for country-specific polling services in West Africa. We work in technical partnership with the Gallup Organisation (USA), to conduct periodic opinion polls and studies on various socio-economic and political issues in Nigeria. More information is available at www.noi-polls.com
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