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Assets, Contributors Rise Under CPS



pension funds
  • Assets, Contributors Rise Under CPS

Total assets under the Contributory Pension Scheme stood at N8.9tn as of the end of February 2019, according to latest figures from the National Pension Commission.

Workers under the scheme stood at 8.5 million in the same period.

The pension industry is a sector specially created to cater to the financial future of workers in their vulnerable age, when they are no longer in paid employment.

It ensures that a retiree continues to receive regular stipends, instead of staying without any salary.

In Nigeria, the CPS was introduced in 2004 by the Pension Reform Act.

Latest figures obtained from PenCom’s 2018 fourth quarter report revealed that the pension industry recorded a 1.63 per cent growth in the scheme membership during the fourth quarter of 2018, from 8.34 million contributors at the end of the third quarter to 8.47 million.

It stated that the growth in the industry membership was driven by the Retirement Savings Account scheme, which had an increase of 138,236 contributors, representing 1.64 per cent.

However, membership of the Closed Pension Fund Administration scheme declined by 71 members (23,332) while the Approved Existing Scheme membership remained unchanged at 40,951.

A breakdown of the RSA registrations indicated a 0.82 per cent (29,455) increase in RSA membership from the public sector during the fourth quarter of 2018 to 3,609,350, which represented 42.92 per cent of the total RSA registrations.

Private sector membership increased by 2.32 per cent (108,781) in the quarter under review, which brought total registrations from the sector to 4,800,834, representing 57.08 per cent of total RSA membership.

PenCom attributed the growth to the increased level of compliance by the private sector as a result of the various steps taken by the commission to improve compliance and coverage, as well as marketing strategies of the Pension Fund Administrators.

The report added that the total monthly pension contribution made by contributors from both the public and private sectors was N5.09tn as of the end of the fourth quarter of 2018.

This showed an increase of N145.41bn, representing 2.94 per cent growth over the total contributions as at the end of the previous quarter.

During the fourth quarter of 2018, the total contributions received from the public sector amounted to N50.03bn (34.41 per cent) while the private sector contributed N5.38bn (65.59 per cent).

A review of the aggregate total contribution showed that N2.56tn or 50.35 per cent of the contribution came from the public sector, while the private sector contributed the remaining 49.65 per cent (N2.53tn).

The aggregate total pension contributions of the private sector increased from N2.43tn as at third quarter of 2018 to N2.53tn as at the end of the reporting period representing a growth of 4.04 per cent.

It added that the aggregate total pension contribution of the public sector increased by 3.21 per cent from N2.51tn to N2.56tn over the same period.

In the report, it stated that many retirees had continued to earn monthly stipends.

The commission approved a total of 4,350 applications for retirement under life annuity during the quarter, bringing the total number of retirees receiving their retirement benefits through the annuity plan to 61,652.

The 4,350 retirees received N8.61bn as lump sum payment and paid premium of N38.91bn to insurance companies and monthly annuity of N260.14m.

This resulted in total lump sum payment of N76.78bn, premium of N328.88bn and monthly annuity payment of N3.26bn as at the end of fourth quarter, 2018..

In the report, the total number of retirees currently receiving their pensions under the programmed withdrawal contracts increased by 4.80 per cent from 191,556 in the previous quarter to 200,747 as at the end of the fourth quarter of 2018.

A sectorial breakdown showed that 65.19 per cent of those that received pension under the PW were from the public sector while retirees from the private sector accounted for the remaining 34.81 per cent.

During the quarter under review, the sum of N26.88bn was paid to 9,191 retirees as lump sum and N1.96bn as monthly programmed withdrawals.

The acting Director-General, PenCom, Aisha Dahir-Umar, said the CPS had been very impactful in Nigeria since the commencement of its implementation in 2004.

She said, “The formation of long-term domestic capital, represented by the over N8.74tn worth of pension assets as at January 2019, belonging to 8.46 million formal sector participants, is slowly but surely changing Nigeria’s financial landscape.

“This, by extension, is also transforming the course and pace of our socio-economic development. For instance, N6.51tn, representing 73 per cent of the total pension assets, is invested in Federal Government securities issued to finance various activities of government.

“Thus, in the area of infrastructure alone, the pension funds invested about N95.31bn in the N200bn Sukuk issued by the Federal Government. Similarly, out of the N10.67bn green bond issued by the Federal Government, pension funds invested N7.19bn.”

The President, Pension Fund Operators Association of Nigeria, Mrs Aderonke Adedeji, said that the micro pension scheme was recently introduced by the Federal Government, and it allowed those in the informal sector to join the CPS.

Before the introduction of the micro pension, she said the informal sector workers did not have the opportunity to have pension accounts.

According to her, there are currently 32 pension operators which comprised of 22 Pension Fund Administrators, six Closed Pension Fund Administrators and four Pension Fund Custodians.

Towards the end of 2018, she said the multi-fund structure was introduced which allowed customers to align their risks profile to their investment portfolio.

She said its investment guidelines had been revised to accommodate the micro pension funds and the non-interest funds, which made the total investment portfolio to rise to six.

According to her, the acceptance level of the CPS had continued to rise among the populace.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.


COVID-19 to Plunge Global Consumer Spending by 8.6 % in 2020



Global Consumer Spending to Drop by 8.6 Percent in 2020

The coronavirus pandemic has changed almost every aspect of people’s daily lives, and consumer spending is no exception. The uncertainty of the COVID-19 crisis caused considerable changes in consumer habits, forcing them to cut down their budgets and prioritize spending.

According to data presented by Stock Apps, the coronavirus outbreak is expected to cut global consumer spending to $44.3trn in 2020, an 8.6% plunge year-over-year.

$4.2trn Drop in Spending Amid COVID-19 Crisis

Falling consumer spending has significant effects on overall Gross domestic product (GDP) growth, considering it accounts for almost 70% of GDP.

Before the COVID-19 crisis, global consumer spending has witnessed steady growth for five years in a row, revealed Statista, IMF, United Nations, World Bank, and Eurostat data. In 2015, it amounted to over $41.5trn. Over the next twelve months, this figure rose to $42.5trn and continued growing. Statistics show that in 2019, consumers worldwide spent a total of $48.5trn, the highest amount in a decade.

However, the coronavirus crisis triggered a sharp fall in 2020, with global consumer spending expected to plunge by $4.2trn year-over-year. Nevertheless, statistics show the following years are set to witness a recovery, with consumer spending growing by 20% to $53.5bn in 2022.

Statista data also revealed that Switzerland represents the leading country globally, with over $40,000 in consumer spending per capita in 2020. Luxembourg ranked second with around $5,000 less than that. Iceland, Denmark, and Norway follow, with $34,300, $25,800, and $25,600, respectively.

60% of Consumers Changed their Shopping Behaviour

The McKinsey&Company survey showed consumers became increasingly cautious with their spending in 2020. Even after countries lifted lockdowns, many consumers still see their incomes fall, forcing them to reduce budgets and change shopping habits.

Statistics show that increased time spent indoors led to significant growth in consumer spending on groceries, household, and home entertainment. Brazil, South Africa, and India lead in this category, with up to 30% consumer spending growth. Major consumer markets like the United States, United Kingdom, Germany, and China witnessed around 15% grocery shopping growth in the first half of the year.

However, with consumers being mindful of their spending and turning to less expensive products, 2020 has witnessed a plunge in clothes and accessories, outside entertainment, services, travel, and transportation spending. Respondents in all countries said they cut down spending in these categories between 20% and 50%.

The McKinsey survey also revealed the COVID-19 outbreak triggered a significant change in the shopping mindset. More than 60% of consumers globally have tried a different brand or shopped at another retailer during the crisis, mostly for convenience, value, and quality.

In China and the United States, over 75% of consumers reported trying a new shopping method, and 60% plan to stick with it post-crisis. The United Kingdom and Germany follow with 71% and 54% of consumers who practiced new shopping behavior. In Japan, where lockdowns weren’t imposed, only 33% of consumers changed their shopping mindset.

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Survival Fund: Buhari Commences Disbursement of N75 Billion Support Fund



President Muhammadu Buhari

FG to Commence Disbursement of N75 Billion Survival Fund to MSMEs

The Federal Government to commence the disbursement of N75 billion COVID-19 support fund to successful Micro, Small and Medium Enterprises (MSMEs) that applied for financial support under the National MSME Survival Fund this week.

On September 10, 2020, the Federal Government announced the introduction of two financial support schemes to support around 1.7 million small businesses with N75 billion.

According to Tola Adekunle, the Special Assistant to the President on MSMEs, Office of the Vice President, who doubles as Project Coordinator, Survival Funds Scheme, payment disbursement to some of the beneficiaries of the schemes would commence this week.

He said, “Presently we are doing it in batches of 12 states to be able to monitor the scheme and as we speak now 12 states are ready. We are hoping that by the end of this week, we will be able to pay 12 states.

“We are starting with the artisans and it is 4,500 persons per state, plus 4,500 for transporters, bringing it to about 9,000 for each state. Right now, we have about 54,000 from 12 states.”

Asked by journalists when those on payroll support would start receiving payments, he said “By the end of this month.

“We want to ensure that the staff start getting their salaries and same for the second and third month.

Adekunle explained that payroll support which was introduced under the survival fund to help businesses that employed between 10 to 50 people, will ensure 10 of the 50 employees are paid between N30,000 to N50,000 depending on their salaries. Payment, he said would commence by the ending of this month.

He said, “We now pay 10 of those people from among the 50 employees and we pay them between N30,000 and N50,000.

“But the minimum we pay is three staffs for three months to support their businesses and to ensure that we are helping businesses to augment their salaries.”

He, however, said the program ended on October 15 but states that were yet to meet their quotas were demanding extension. A demand he said was valid given that only less than 20 states have met their quotas.

In my own opinion, it is valid but the decision lies in the hands of the committee and the project coordinator so I have to convince them based on data analysis,” he said.

Speaking on the total number of applicants for the payroll support, Adekunle said, “As at the day it closed, we had about 432,000 businesses that had applied. However, we have shortlisted less than 70,000 businesses that qualify and meet the requirements.”

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Airtel Compensate Customers Following Service Disruption, Not Anonymous



Airtel Financial Results

Fake Anonymous Hacker Did Not Credit Airtel Subscribers, Airtel Compensate Customers For Service Disruption

Airtel Africa on Monday compensated customers by sharing free N1,000 airtime following Friday’s service disruption.

In a text message forwarded to customers, the telecommunication company says “Dear customer, we apologise for the recent service disruption experienced on October 16. “Normal service has been restored and your line will be credited with five minutes of on-net calls and 100MB of data both valid for one day.

This was before the fake anonymous hacker claimed it has hacked the system of the company and credited all Airtel subscribers N1,000.

Most Airtel users that did not know the reason for the unusual gesture took to their social media to validate the fake anonymous claim, a claim the real anonymous has refuted and warned people to be careful of sharing their vital information with criminals parading as anonymous.

Nigerian youths continue to demand anonymous support as they seek an end to police brutality, harassment and dehumanisation of innocent citizens. The youths have vowed to continue protesting until the demanded reform and changes are effectively implemented, an unusual demand in a nation known for its lackadaisical and nonchalant attitude towards change and reform.

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