Stanbic IBTC Reveals Plan to Protect Pension Funds from Falling Naira Value

Dike Onwuamaeze

Nigeria’s biggest pension fund administrator, Stanbic IBTC Pension Managers Limited yesterday disclosed that a framework would soon be put in place to protect and grow pension funds by investing a portion of these funds in dollar-denominated assets.

The administrator explained that the changes would address the concern of pension contributors regarding the devaluation of their pension account due to the erosion of the value of the Naira in the foreign exchange market and domestic price inflation.

The Head, Investment Management, Stanbic IBTC Pension Managers, Mr. Jide Allo revealed this plan during its a virtual wellness session yesterday, which he said, had been a subject of engagement in the pension industry.

At the session, Allo explained two fundamental changes, which according to him, would allow pension managers to invest pension funds in dollar-denominated assets and allow contributors to use part of their pension accounts as equity contribution for mortgage or homeownership loans would be rolled out soon in Nigeria.

He added that the changes would address contributors’ concern regarding the devaluation of their pension account due to the erosion of the value of the Naira in the foreign exchange market and domestic price inflation.

Allo said: “There are two major changes we are going to see in the short and medium terms. One major concern from our clients is the devaluation of their pension accounts.

He said: “We are happy to inform our clients that based on ongoing engagements in the industry. We believe that very soon a framework will be put in place that will allow us to better protect and grow pension funds by investing a portion of these funds in dollar-denominated assets.”

He, also, said another imminent improvement would be the ability of contributors to use part of their pension assets as equity contribution for mortgage or home loans.
According to him, I am sure our clients will be very delighted to hear that. These are things that will come onboard any moment from now.

He said that those who would not subscribe to the pension contributory scheme were denying themselves “the privilege of intentionally creating a social safety net for themselves.
“We have seen so many SOS calls to the general public to rescue some of our icons in the entertainment industry. But setting funds aside in the pension account would help to better manage some of such developments.

“Definitely, pension is something that is very important for everyone,” he explained.
At the session, Chief Executive, Stanbic IBTC Holdings PLC, Mr. Demola Sogunle explained the significance of RetireFit, which according to him, was an attempt to encourage people to adopt a healthy lifestyle that would optimise their wellbeing beyond their active work-life.

Sogunle said: “To us, retiring fit incorporates healthy living, being physically active, and strategic financial planning for the future.

“This, we hope, will be a clear reminder to people to pay attention to self-care and be physically active just as we mind our money. Our sole desire is to see more people become physically and financially fit, as these two factors contribute to the general health and the wellbeing of our clients.”

Also at the session, Chief Executive, SIPML, Mr. Olumide Oyetan, stated that the whole conversation about retiring well and retiring fit is very germane.

Oyetan explained that the idea “is that as people get older and start to come to retirement, health challenges might start to creep up. We want clients to deliberately start on a journey of exercising and keeping fit. Their rewards are bountiful.

In specific terms, Executive Director, Business Development, SIPML, Ms. Nike Bajomo explained the rationale for focusing on exercise and fitness.

According to her, when we do not take care of ourselves and general wellbeing we are probably going to retire tired and unhealthy and all the hard-earned money we have put together for our retirement will be spent on medical bills.

Bajomo, therefore, said: “It is important to emphasise that as you prepare for retirement also ensure that your health is well taken care of.”

The Medical and Wellness Consultant, Stanbic IBTC, Dr. Sylvanus Jatto explained that being physically fit and healthy are investments that would help people to enjoy their wealth during retirement.
He noted that noting quite a number of the chronic diseases pensioners battling with during retirement “are often associated with physical inactivity.”