Metro 80% Retirees opt for Wrong Pension Plan - Expert



The Financial Planner, Leadway Assurance Company, Mr Fatoye Paul on Friday in Abuja said 80 per cent of retirees in the country made wrong choice of pension plan.

Paul made the assertion in an interview with the News Agency of Nigeria (NAN) on the sidelines of the ``Verification and Enrolment for Federal Government Employees Due for Retirement in 2015''.

Paul said that majority of the retirees go for programmed withdrawal as their pension on retirement because they were unaware of other plans available.

He explained that there were a lot of insurance companies present at the exercise to enlighten prospective retirees about the retirement plans available to them.

He decried the unpopularity of the annuity plan, which is a type of life insurance package for retirees in spite of all publicity being done in that regard.

``Majority of prospective retirees are still unaware of the options available to them at retirement. We are here to let them know that there are three options.

``According to the Pension Reform Act 2004, Section 4, there is the option of monthly or quarterly withdrawal on the basis of an expected life span.

``The second option is annuity for life, purchased from a life insurance company, licence by NAICOM.

``And lastly, we have the lump sum withdrawal of not more than 50 per cent of total retirement savings out of which the rest will be either programmed withdrawal or annuity,'' he said.

Paul urged prospective retirees to opt for the annuity because it is a good retirement plan that pays higher than the other options of programmed withdrawal.

He told NAN that for annuity, the pay is for life, no matter the number of years the retiree lives.

He explained that in annuity, if a retiree dies within a guaranteed period, their beneficiaries would be paid the balance of their lump sum by the insurance company.