Economy
Micro-pension Scheme will Deepen Asset Accumulation in Nigeria–Stanbic IBTC Pension Managers
By Dipo Olowookere
Managing Director of Stanbic IBTC Pension Managers Limited, Mr Eric Fajemisin, has backed measures taken by the National Pension Commission (PENCOM) to sustain growth of the Nigerian pension industry.
According to him, micro pension scheme, multi-fund investment structure and Pension account transfer window, to mention but a few, are among initiatives capable of putting the sector in stronger footing going forward.
Stanbic IBTC Pension Managers Limited is the biggest pension fund administrator (PFA) in the country.
From Sunday, July 1, 2018, the new multi-fund structure announced by the industry regulator would become operational.
Speaking at a media interactive session in Lagos on Monday, May 28, 2018, Mr Fajemisin said such reforms and innovations are necessary to maintain the strength and depth of Nigeria’s Contributory Pension Scheme (CPS).
Mr Fajemisin noted that the Retirement Savings Account (RSA) Multi-Fund Investment structure, which replaces the “one-size-fits-all” arrangement that puts all active contributors into one RSA Fund, would resolve the challenge of asset-liability risk management faced by the operators.
According to him, the micro-pension scheme will help in deepening asset accumulation in the country, and provide the crucial capital required for investment in critical sectors of the economy.
As an initiative designed to cover an estimated 70 percent of Nigeria’s working population in the informal sector, the scheme offers enormous benefits to the society and ensure improved standard of living for the elderly, guarantee the safety of funds and may provide access to other incentives, such as mortgage facilities and health insurance., regardless of challenges associated with its seamless implementation.
By aligning the age and risk profile of RSA holders to match the four funds, 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.
Among its other benefits include improved standard of living for the elderly, safety of funds and access to other incentives, such as mortgage facilities and health insurance. In addition are flexible contribution remittances, the opportunity to make withdrawal prior to retirement and the enhancement of financial inclusion in the country.
On the proposed pension transfer window, which allows a RSA holder to switch PFA once a year, the Stanbic IBTC Pension helmsman said it would deepen the democratic space in the pension industry as well as encourage healthy competition, resulting in further transparency and accountability, which would in turn enhance efficiency, innovation and service delivery.
Mr Fajemisin also reviewed the 2014 Pension Reform Act and the impact on the CPS. On the enabling law, he said the introduction of more stringent penalties for erring operators and directors, especially as it relates to mismanagement of funds, has engendered greater corporate governance, making it almost impossible to misapply pension funds by anyone.
By increasing the contributions of the employer and employee to 10 and 8 percent respectively, Mr Fajemisin said the Act has ensured the availability of more benefits to contributors at retirement. In addition, the Act makes the non-remittance of employees’ contribution by the employer an offence which the regulator can prosecute in court.
Amongst its provisions, which expanded its coverage, private sector organizations with just three employees or more are required to register under the scheme; while the law also compels an employer to open a Temporary Retirement Savings Account (TRSA) on behalf of an employee that fails to open a Retirement Savings Account within three months of being employed.
The PFA’s Head of Business Development, Mrs Nike Bajomo, said the company is already reaching out to its over 1.6 million RSA holders nationwide to create awareness about commencement of the multi-fund structure with effect from July 1, 2018. She said the PFA will continue to engage various stakeholders on developments in the industry to ensure the provisions of the CPS are fully harnessed to the benefit of all. Such platforms as the employers’ forum, preretirement seminars, among other initiatives Stanbic IBTC Pensions organises yearly, are fashioned to ensure regular engagement and to drive awareness.
Backed by the experience and expertise of Stanbic IBTC Group, a member of the over 155-year-old Standard Bank Group Mrs Bajomo said the PFA will not relent in providing excellent services to its RSA holders and Nigerians. Stanbic IBTC Pension Managers Limited, she said, 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.
Stanbic IBTC Pension Managers Limited is a subsidiary of Stanbic IBTC Holdings, a member of Standard Bank Group, a full service financial services group with a clear focus on three main business pillars – Corporate and Investment Banking, Personal and Business Banking and Wealth Management. Standard Bank Group is the largest African financial institution by assets. It is rooted in Africa with strategic representation in 20 countries on the African continent. Standard Bank has been in operation for over 155 years and is focused on building first-class, on-the-ground financial services institutions in chosen countries in Africa; and connecting selected emerging markets to Africa by applying sector expertise, particularly in natural resources, power and infrastructure.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south territory with a decline of 0.56 per cent on Wednesday, April 2.
This brought down the market capitalisation by N13 billion to N2.417 trillion from N2.430 trillion, and downed the NASD Unlisted Security Index (NSI) by 22.57 points to 4,062.87 points from the previous session’s 4,062.87 points.
It was observed that the NASD exchange ended with three price gainers and three price losers during the trading day.
MRS Oil Plc depreciated by N19.00 to close at N171.00 per unit compared with the previous price of N190.00 per unit, NASD Plc lost N4.14 to trade at N37.36 per share compared with Wednesday’s N41.50 per share, and Central Securities Clearing System (CSCS) Plc gave up N2.00 to sell at N78.00 per unit versus N80.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc appreciated by 19 Kobo to N93.00 per share from N92.81 per share, Food Concepts Plc expanded by 15 Kobo to N2.87 per unit from N2.72 per unit, and Great Nigeria Insurance (GNI) Plc improved by 2 Kobo to 52 Kobo per share from 50 Kobo per share.
Yesterday, the volume of securities dipped by 91.8 per cent to 260.2 million units from 3.2 billion units, the value of securities went down by 98.1 per cent to N154.2 million from N8.3 billion, while the number of deals soared by 53.3 per cent to 46 deals from 30 deals.
GNI Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 56.9 million units valued at N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.
The most traded stock by volume on a year-to-date basis was also GNI Plc with 3.4 billion units sold for N8.2 billion, trailed by Resourcery Plc with 1.1 billion units exchanged for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.
By Adedapo Adesanya
The Naira dropped N2.09 or 0.15 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 2, to trade at N1,380.79/$1 compared with Wednesday’s rate of N1,378.70/$1.
However, it appreciated against the Pound Sterling in the official market by N2.77 to quote at N1,824.86/£1 versus the N1,836.57/£1 it was traded at midweek, and improved its value against the Euro by N10.54 to N1,591.92/€1 from N1,602.46/€1.
Yesterday was the last trading session of the week for the local currency in the spot market, as the market will be closed on Friday and Monday for the Easter Holiday.
At the black market, the Nigerian Naira maintained stability against the greenback yesterday at N1,405/$1, but gained N8 at the GTBank FX counter to settle at N1,388/$1, in contrast to the previous session’s N1,396/$1.
Pressure eased on the domestic currency as strong policy indicators have helped calm the majority of worries within the financial systems. Particularly in the remittance segment, the apex bank has directed all International Money Transfer Operators (IMTOs) to route remittance transactions through designated Naira settlement accounts in banks, a move aimed at boosting transparency and channelling more foreign exchange into the formal market.
This helps take off pressure from the foreign reserves, which have fallen below the $50 billion mark as they are gradually decreasing rather than falling sharply.
Meanwhile, the cryptocurrency market was bullish on Thursday, as macro sentiment shifted against recent optimism after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.
The remarks came after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.
Cardano (ADA) chalked up 1.9 per cent to trade at $0.2435, Dogecoin (DOGE) grew by 1.2 per cent to $0.0912, Ethereum (ETH) appreciated by 0.8 per cent to $2,066.37, Bitcoin (BTC) added 0.5 per cent to sell at $67,080.53, Solana (SOL) increased by 0.5 per cent to $79.91, and Ripple (XRP) jumped 0.2 per cent to $1.31.
Conversely, Binance Coin (BNB) dipped 0.7 per cent to $586.90, and TRON (TRX) depreciated by 0.3 per cent to $0.3147, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Dipo Olowookere
The local stock market was relatively flat on Friday, as the bears and the bulls shared the spoils of war, though investor sentiment turned bullish compared with the preceding session’s bearish posture.
Data from the Nigerian Exchange (NGX) Limited showed that the All-Share Index (ASI) was marginally down by 4.66 points as it ended at 201,698.89 points versus Wednesday’s 201,703.55 points, and the market capitalisation slightly contracted by N3 billion to N129.806 trillion from N129.809 trillion.
Customs Street was shut on Friday because of the public holidays declared by the federal government today and next Monday.
Business Post reports that John Holt declined by 9.91 per cent to N15.45, Abbey Mortgage Bank shed 9.60 per cent to trade at N8.95, International Energy Insurance slipped by 6.48 per cent to N3.32, Chams shrank by 5.30 per cent to N3.75, and Tantalizers depreciated by 5.18 per cent to N4.03.
On the flip side, Unilever Nigeria improved by 10.00 per cent to N103.40, Fortis Global Insurance gained 9.82 per cent to trade at N1.23, Multiverse appreciated 9.81 per cent to N20.15, Legend Internet advanced by 9.38 per cent to N6.30, and Zichis grew by 9.02 per cent to N14.14.
The market breadth index was positive during the trading session, as there were 35 appreciating stocks and 24 depreciating stocks.
Yesterday, investors traded 560.0 million equities valued at N19.3 billion in 49,676 deals, in contrast to the 815.5 million equities worth N33.3 billion transacted in 52,641 deals in the preceding day, representing a drop in the trading volume, value, and number of deals by 31.33 per cent, 42.04 per cent, and 5.63 per cent, respectively.
Secure Electronic Technology dominated the activity log with 59.7 million shares valued at N61.1 million, Wema Bank exchanged 52.0 million equities worth N1.4 billion, VFD Group transacted 36.0 million stocks for N410.5 million, Access Holdings sold 35.3 million shares valued at N914.8 million, and Chams traded 31.0 million equities worth N115.0 million.
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