Over 68m Nigerians still excluded from pension – FGPL CEO

Wilson Ideva is the Managing Director and Chief Executive Officer (CEO) of First Guarantee Pension Limited (FGPL). In this interview, he speaks about how to grow micro pensions and the impact of the pension industry on the economy. This is your second time heading FGPL, what led to the break? FGPL existed earlier and I […]

Wilson Ideva is the Managing Director and Chief Executive Officer (CEO) of First Guarantee Pension Limited (FGPL). In this interview, he speaks about how to grow micro pensions and the impact of the pension industry on the economy.

This is your second time heading FGPL, what led to the break?

FGPL existed earlier and I was the chairman as of 2007, but it was taken over. However, it was handed back to the shareholders with a board in 2020. As a consultant, I proposed to the board’s Chairman, Alhaji Kashim Ibrahim Imam, what they needed to do to revamp the company. The board chairman said they wanted me to come back as CEO. I resumed on May 18, 2020. It was a difficult job because of the several conditions from PenCom, but by God’s grace we fulfilled all the conditions. We settled all the shareholders, except the ones we weren’t able to trace. We paid dividends and we were about to settle down for growth when Access Corporation bought into FGPL.

The board in their wisdom said they wanted a bigger corporate name, and there was this new recapitalisation that raised shareholders’ funds to N5bn as against N1bn. This gave rise to Access Corporation’s major stake in FGPL.

Access also bought into Sigma Pensions. So, we are in the process of a merger, and hopefully in the next few weeks there will be Access Pensions Limited – a combination of FGPL and Sigma Pensions Limited.

After the merger, I will also be exiting the industry, and this time around, I will not be returning as CEO of any Pension Fund Administrator (PFA).

How has the company fared since your return?

We have been able to build staff confidence. We have also built a corporate office since we moved our head office from Lagos to Abuja. We have built a big edifice with modern facilities and ICT infrastructure. We built that property in one year and without a bank loan. The board, led by Kashim Ibrahim, and I as CEO will be remembered for that legacy.

Shareholders also get a better return on investment. For Access Corporation, one of the most aggressive institutions with the largest bank network in Africa to be interested in a PFA with assets under management slightly below N300bn, there must be something they are seeing in FGPL.

Through this transaction, shareholders of the company have been made richer through the premium payments on their shares. We have recovered the shareholders’ assets and refocused the company with assets under management of about N295bn.

What is the impact of the Contributory Pension Scheme (CPS) on the economy?

It is quite enormous. The value of the pension assets is over N16trn. The money is not sitting idle; it’s in various sectors of the economy. If you look at the federal government’s fixed-income markets, about 60 per cent of pension funds go there. We would have had more inflation if not for the pension assets. If you look at the banks, most banks are being kept afloat by pension assets. Maybe they would not have been able to lend. The pension industry has been a quiet revolution maybe because of the conservative nature of the industry. We have also invested quite a bit in the infrastructure of this country. If you look at the bonds, Sukuk and others, most of them are financed by pension assets. Most of the power assets now are being built on pension assets. Without the pension assets, we would have been in deeper fiscal crises because pension assets have intervened in different sectors of the economy.

What are the most dominant challenges and growth prospects in the industry?

The last figure I saw is that pension penetration now is about 12 million, Retirement Savings Account (RSA) holders, micro pension inclusive. What is the workforce of Nigeria? We are told it is about 80 million. That means about 68 million Nigerians have no form of pension. Whether you work in a formal setting or not, you must get old. And when this huge number of people retire, they won’t have any form of pension.

The greatest challenge is how to get up to 50 million Nigerians to enroll. We are being told that about 68 million are potential micro-pension participants. We have family businesses, individual businesses, professional practices, legal practices – accounting, surveyors, etc, except those in big firms, the smaller firms don’t have pensions. What of those in the creative industry like entertainers? They will get old. You are making so much money, if you don’t invest wisely or you don’t have a pension, what happens? The greater challenge is how we can improve penetration such that everyone draws a pension in old age.