By Favour Nnabugwu
The Pension Fund Operators Association of Nigeria (PenOp) has commended the National Pension Commission (PenCom) for the release gog guideline on mortgage would creat massive jobs
PenOp in a statement on Tuesday said the guideline jobs in the construction value chain for artisans and others
it will be recalled that the guidelines released by PenCom allows pensioners to use their Retirement Savings Account (RSA) as equity contribution for obtaining residential mortgages.
“We believe it will create massive jobs for artisans and blue color workers involved in the construction value chain and also further open up wealth management and financial planning industry”
“RSA holders will now begin to plan towards a target RSA balance because they have a goal of owning a home.
Though the provision, PenOp said had been part of the amendments that occurred when the Pension Reform act was amended in 2014.
“We are aware that the process of actualizing this portion of the act has gone through a number of iterations and stakeholder engagement and we are happy that it has finally been released”.
“Whilst we realize that there might be some initial teething problems, we the pension operators are excited and are primmed to partner with the commission, RSA holders and other stakeholders to ensure that this policy actualizes the reason for why it was set up”.
It added that the home ownership ratio and first-time home buyer statistics in Nigeria is very low and we believe that this policy will help to improve this and also provide increased benefits to RSA holders in the immediate.
This policy is very catalytic in nature and has the potential to spur growth in other sectors of the economy, It should boost the mortgage finance and home loan sector, in addition to having a positive effect on the construction value chain and building materials sector.
“We also believe that voluntary contributions will increase because people can use the contingent portion of their voluntary contributions as part of the equity contribution for residential mortgages. In addition, more companies will now take their contributions more seriously as will staffs of these companies.
“For those who do not have an RSA account and are working in the formal sector, we urge them to commence the process in conjunction with their employers.
“For those in self-employment, we also encourage them to take advantage of the Micro Pension Plan (MPP). Regarding the MPP, we are also happy that the policy extends to this is extended to self-employed individuals and those in the informal sector.
“We believe this will help to grow the Micro Pension business and ensure that millions of Nigerians in the informal sector will have the opportunity to enjoy structured pensions when they retire and also benefit from the gains of the pension reform.
“Overall, we believe this policy is net positive for the pension industry and the economy as a whole.”
It noted that the effects are catalytic and will help to galvanize various sector of the economy, while adding that the pension industry over the years has played a significant role in the local debt and equity market, financing National and Sub National projects and debt programs and financed transformational companies and projects.
The industry according to the Association is primmed to do more and we believe that this new policy is another milestone in the positive effect of the pension industry on the economy and also another example of the collaborative nature of the pension regulator that leads to gains for the wider economy