Sat. Nov 23rd, 2024
Retirement Savings Account

By FBNQuest Research

We are indebted to the NBS for its recent report on the distribution of retirement savings accounts (RSAs).

We learn that the total in Q2 2017 was 7.59 million, divided by employment as shown in our chart. The total in Q1 was 7.49 million, and the increase of 100,000 over three months shared between the private sector (80,000), the FGN (10,000), and state and local governments (also 10,000).

This division is understandable, given the pressures on public finances. We are surprised that the state governments registered any increase at all.

The total in Q1 represented 10.9 percent of the working-age population at end-2016. We have to remember that subsistence agriculture and informal trade probably account for at least 50 percent of all employment in Nigeria.

Divided by age, just 1.9 percent of all holders in Q2 were over 65, and 38.5 percent aged between 30 and 39 years.

The demographics in Nigeria favour the PFAs in terms of matching inflows from contributions with outflows for pension payments.

When we match the data from the NBS for Q1 with the assets under management (AUM) for March as shown by the National Pension Commission, the source of the bureau’s raw data, we find that the average account was worth N640,000.

The AUM of RSAs accounted for 75 percent of total AUM in Q2, compared with 62 percent five years earlier. Their share has risen at the expense of the defined benefit schemes.

Local media reports note that the FGN has not met its obligation under 2014 legislation to make an increased 10 percent contribution to all employees’ pensions.

By Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

Related Post

Leave a Reply