Brutal Truths: Due to economic pressures, a lot of people are more open to withdrawing their full pensions savings

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Today, because of the economic pressures, a lot of people are more open to the possibility of withdrawing their full pensions savings.

Mrs Folashade Onanuga, fmr Director General, Lagos State Pension Commissioner (LASPEC), stated this during her address as keynote speaker at National Association of Insurance and Pension Correspondents (NAIPCO) conference saying Today, because of the economic pressures, a lot of people are more open to the possibility of withdrawing their full pensions savings.

“Is there a way to accommodate this request? If for instance, employees with RSA balances of less than a certain amount are allowed to withdraw their full pension savings, then what is the rationale for locking some others in?  For example, can we include penalties for early withdrawal?  Can incentives like basic levels of healthcare be offered as incentives to encourage clients to remain with their pension provider after they retire? Are there opportunities to offer clients more within the ambit of the law?

 

The 6th NAIPCO National Conference 2021 with the Theme: ‘COVID-19 IMPACT ON FINANCIAL INCLUSION: OPPORTUNITIES FOR INSURANCE AND PENSION SECTORS’ event held recently in Lagos

Mrs Onanuga noted that such flexible options will give clients of pension funds more control over their future while also catering to the profit motive of operators.

 

She pointed out that when pensions products are demanded by the average Nigerian Worker either in the formal or informal sector and not impressed on them, a major milestone in financial inclusion would have been achieved.

 

“Today, pension funds under management are over 13 trillion Naira with enrolment less than 10million registered contributors.  According to her, with the inclusion of the informal sector under the micro pension plan, this can be much higher.

 

However, she said we must understand the needs of the population group we want to serve adding that we cannot use conventional products with this market segment.

 

In addressing these needs and concerns, she said we will be doing our part to creating lasting economic change in Nigeria.

In conclusion, the fmr DG of LASPEC noted that the opportunities which exists for increased financial inclusion in both the Insurance & pension sectors will only be achieved if we design products that are perceived to meet the people’s needs and could be seen as improving their welfare rather than impoverishing them.

 

Therefore, she said operators must constantly be engaged in strategic thinking; have a broad understanding of the economic situation of the country, understand the mindset and ways of life of different ethnic groups and then have a variety of products from which the people can make a choice from.


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