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By Henry Uche, [email protected]
Whether you have five years, three or less to exit your current paid job, it’s only wise that you know what after-service life should be like. Fortunately and unfortunately for most workers who are retiring soon, the pension market these days bustling with pension insurers canvassers. If you are fortunate, your pension agent would be true and genuine insurer. But like many financial sector marketers, clients would require a knowledge of caveat emptor (let the buyer be aware).
Fortunately, the would- be pensioners who have 3 -5 years ahead of them stands to benefit from the new bill under consideration (The Nigeria Pension Reform Act 2014(Amendment) Bill 2022, which will in all intent and purposes bring them some promises of hope.
This bill under consideration at the National Assembly seeks to address two major issues: One, that which would allow police pensioners to operate an independent pension arrangement different from what the present Contributory Pension System offers. The second issue in the new amendment bill is that which holds a greater promise to core Civil Servants as the Bill now proposes that a lump sum of 75 per cent of the total emolument be paid to them upon time of exit as against 25 per cent being currently paid to those who had exited and would exit before the bill becomes a law.
For emphasis: The House of Representatives Committee on Pension held a Public Hearing on two Bills all seeking to amend the Pension Reform Act 2022.
The first Bill, “A Bill for an Act to amend the Pension Reform Act 2014 to provide for the exemption of the Nigerian Police Force from the Contributory Pension Scheme and for related matters”, was sponsored by Hon.
Francis Ejiroghene Waive, while the second Bill, “A Bill for an Act to amend Sections 1 (c), 7(2), 8(1), 18, 24 and 99 of the Pension Reform Act cap P50 LFN 2014 providing that a pensioner shall receive at least 75 per cent of his retirement benefits immediately upon retirement and criminalise the undue delay in the payment of pension”, sponsored by Hon. Jimoh Aremu Olaifa.
As expected, opinion varies among economic analysts as to the intendment of this coming legislation. There are those who feel that the bill when it becomes an Act would have grave effects on the Nigeria economy, particularly on the culture of savings, income generation by financial institutions and that it would promote profligacy among fresh pensioners.
However, promoters of the bill are convinced that current economic situation does not support the idea of 25 per cent of an expected income of sort. This is because the economic reality under this administration undoubtedly has a biting effect so much that if not for Divine intervention, many Nigerians would have die before their due date, even though many have died out of economic misery and penury since 2015.
Let’s imagine a hypothetical situation where a retiree is expecting N2 million as gratuity and 25 per cent of N2million (N500,000) is paid to him as at the age of 65 or thereabout, what can 25 per cent of N2million offer to a man of that age where there is no economic cushions like health benefits, affordable housing, affordable education for a retiree whose children are still in school, unstable power supply, insecurity et cetera. Would a man or woman of such age with numerous economic burdens live long enough to enjoy the fruits of his sweat? What would 25 per cent of N2million which would not be paid as promised and of which while expecting it, the old citizens would have to commute over 20 kilometers several times to get information from the source of the payment and of which hardly is there any hope in sight for payment.
These hypothetical story may sound funny but it’s not contradictory to logic in our unfortunate current economic realities. Howbeit whether the bill sees the light of the day or not, a humble suggestions to retiring employees would be:
To embrace Prudence to and thorough . With prudence accompanied by old age wisdom, a retiree would be cautious in every financial commitment. More so, it would only be a matter of prudence if a freshly retired person would avoid unnecessary social cultural activities as well as wasteful lifestyle.
Whether you have retired over 10 years ago or you are planning to retire in few years to come, investing and reinvesting in what you don’t have idea about would not be an option to embrace.
When people come to advertise new business idea with you such as becoming a farmer after spending your useful Life in corporate environment for over 20 years to become an overnight farmer, one need to circumspect painstakingly before giving it a shot. We must avoid people who promises us massive portion of land far away from where we currently live, where your age and health are no longer in agreement with external forces.
A lot of financial scammers go about seeking for fresh retirees to devour or at least a take a bit of their cake (retirement money). Moreover we must plan against the Socio- Cultural Practice of expensive family burial as this is a serious concern in some parts of the country.
A retiree ought not to contemplate building a house or any structure that is beyond his earnings either you are retired or while in active service, because the probability of earning more income after retirement is either zero or at best half.
On a lighter note, let it not be that what classical economists had always say about African men that when they received lump sum of money, they contemplate marrying more wives or engage in frivolous lifestyle. Our fate after active service life is a function of how well we prepare ourselves.
