Tuesday, October 21, 2025
24.9 C
Lagos

Sustainability of CPS Key to Thriving Pension Sector – Absa

Absa, a leading pan-African bank with a strong footprint across the African continent, has advised policymakers to prioritise the growth of the contributory pension scheme (CPS) amongst others to ensure the pension sector maintains a healthy growth trajectory.

The banking group, which operates two licensed subsidiaries, Absa Capital Markets Nigeria Limited and Absa Securities Nigeria Limited, in the country, made the critical input in a recent interview session by its Country Head of Equities and Fixed Income Sales, Simi Ojumu. She dissected the pension industries and shared strategies necessary for improving the business of pension in the domestic market.

She said the pension industry has maintained an impressive growth curve since the enactment of the Pension Reform Act (PRA) of 2004, which made it mandatory for every employer with more than five employees to enrol each one and make a consistent contribution to the pension fund.

According to her, “The CPS, through the multiple operators and agencies, the Pension Fund Administrators (PFAs), Pension Fund Custodians (PFCs), Closed Pension Fund Administrators (CPFAs), and the regulator, the National Pension Commission (PenCom), has created an ecosystem of career path, employment, business and investment opportunities for several Nigerians.”

Citing recent reports, she explained that the robust policy intervention in the pension sector has led to a jump in Nigeria’s Net Assets Value of pension assets from a deficit position two decades ago to N13.6 trillion valuations in 2022 while scaling the sector’s overall contribution to the GDP from 0.9% in 2004 to 9% in the current year.

Despite the recent growth, she admitted that the CPS continues to face some challenges. Low coverage, inadequate awareness of the scheme’s benefits and the inability to ensure strict compliance by the parties are some of the issues that are still plaguing the sector.

“The most important thing would be to ensure the sustainability of the contributory pension scheme. Ensuring participant compliance by the federal, state governments and the private sector, creating awareness of the benefits, and creating an investor-friendly environment are some of the ways that policymakers can ensure that the pension sector continues to thrive and improve its contributions to the country’s GDP,” Ojumu said.

She reiterated that the recent cases of mergers and acquisitions (M&A) by pension fund administrators to recapitalise is a sign of growth in the industry. The new entities that are emerging from the merger and acquisition framework will have more resources at their disposal.

However, she cautioned that a smooth transition within the M&A framework is necessary to ensure that the recapitalisation efforts do not harm the contributors’ assets.

“Smooth transitions are also largely dependent on the investment bank that facilitates the reorganisation and, in this case, the mergers and acquisition. This is one of the core services of Absa Group in Nigeria. At Absa Nigeria, we have proven expertise to manage mergers and acquisitions to ensure a smooth transition of the new company.”

 

 

 

 

spot_img
spot_img
spot_img

Hot this week

When Transparency Becomes Luxury: INEC and ₦1.5bn FOI Controversy

By Chike Walter Duru When the Independent National Electoral Commission...

Unity Bank Corpreneurship Challenge Beneficiaries Hit 578 as 30 More Winners Emerge

  No fewer than 578 young entrepreneurs across Nigeria have...

Polaris Bank Reinforces Commitment to Exceptional Customer Experience at Global Trade Forum in Ibadan

Chris Ofikulu, Executive Director, Retail & Commercial Banking, Polaris...

Fidelity Bank Bags Awards for Best Export, Trade Support and Innovation

  Fidelity Bank’s market leadership has been affirmed once again...

13-year-old Rhema-Love Abraham Emerges Winner of 2025 Heirs Insurance Essay Championship

L:R- Funmi Olotu, National Coordinator, National Social Safety-Nets Coordinating...

Topics

Beiersdorf Supports Paediatric Cancer Patients with N16m Donation

L-R: Marketing Activations Manager, Beiersdorf Nigeria, Oluwadamilola Adeyemi; Chief...

Mercedes Sales Rise to New Record in October, Boosted by China Demand

The new C-class wagon is helping to boost Mercedes...

Nigeria Records Steady Increase in Active Voice, Internet Subscription

Nigeria has witnessed a steady increase in active voice...

Wema Bank’s 5for5 final Promo Draw: Last Set of Winners Emerge in Season 2

From left to right:  Chief Experience Officer, Wema Bank,Adeyemi...

Sustained Gains Trigger another Positive Run on the Local Bourse

Yesterday’s trading session posted another bullish performance as the...

NEXIM Bank to Support Growth of Mining Sector

“Solid minerals, along with the other three sectors of...

Celebrating a Decade of Excellence: NHEA at 10

By NHEA Media & Communication In the bustling heart of...
spot_img

Related Articles

Popular Categories

spot_imgspot_img