Nigerian Workers, How Prepared Are You For Retirement?

President, Nigeria Labour Congress (NLC), Comrade Aliyu Wabba
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By Omotayo Olatubosun Tope, PhD

 Human nature dislikes unpleasant realities. The statutory, terminal actuality which many workers are likely to experience is retirement. However, studies have shown that quite a significant percentage of workers do not want to discuss retirement – until it is forced on them by circumstances beyond their control and therefore becomes inevitable.

  Fear of the unknown – real or imagined – surrounding what the future holds in the post-service years lies at the heart of many workers’ reluctance to engage in any meaningful and sustained conversation on retirement. Yet this is a discussion every worker should have and keep in focus right from their first day in formal employment and constantly pay attention to as they progress in their career life. This is because retirement is a must for all formally employed workers.

    Some unforeseen occurrence or turn of event can foist retirement on the worker at any point in his or her career. These include crippling accident on the job, ill-health, retrenchment and even death. However, the nature of the retirement in focus in this article is the legal, terminal one in which the worker serves out the number of years allowed in a particular employment or clocks the age of disengagement on the job.

Active service year is usually the period in which an individual operates at the optimal physical and mental level. During this period the vigour to pursue daily activities and performance as expected on designated duties largely depends on physical and mental dexterity. However, because we all age, bodily and cerebral capacity tends to reduce over time. In the long run this tells on our ability to deliver on the job. Invariably, we have to retire voluntarily, statutorily or forcibly, the latter scenario impressed upon us if we continue to deny the limitations imposed upon our body and mental capacity by ageing in the passage of time on the job.

   Retirement can be viewed as a safety net designed to avoid disruption in the operations of the work-place and smooth functioning of society which may occur if the labour force is not renewed periodically through the injection of fresh, younger hands into the working pool. Thus retirement is a planned means of orderly disengagement of individuals from work, with a view to preserving the normal and proper functioning of the society.

  Unlike the psychological disposition of the typical workaholic nobody is indispensable on the job. Also, excellent job performance does not immune an individual from retirement. Retirement is therefore inevitable and it is the course of wisdom for any worker to prepare for it adequately in order to have a successful post-service life.

  Scholars recognise that accepting retirement can be difficult, especially when it is sudden and without adequate preparation in terms of alternative activities, particularly one which can mitigate the loss of on-the-job benefits like wages and salaries, and even the status or influence that comes with holding a job. Consequently, in some situations individuals find it difficulty retiring at the appropriate time, making it inevitable for Management or the authority concerned to forced such individuals to leave their job – e.g. through retrenchment.

  A fairly good number of workers retire with frustration because they are not prepared for retirement. Some may end up with debilitating sickness like hypertension and stroke as a result of palpable fear of retirement. Many live below the poverty line because of loss of the regular source of income which formal employment usually guarantees, inflation which erodes the value of their gratuity – if it is paid at all –  and irregular pension payment, which plagues many countries, especially developing nations like Nigeria.

  The increasing number of retirees in modern times and the fact that disengagement from work is inevitable at some point in a formal career have generated social complexities which all nations of the world contend with.Some of these challenges include poorly designed national retirement policies and structures, non-provision of or haphazard contribution to the worker’s retirement account by employers of labour, poor enrolment of workers on pension schemes either due to the negligence of the workers themselves or that of other actors in the pension/retirement value chain, bad record-keeping by pensions board or managers, loss of pension savings to such anomalies like bad investment decision by pension administrators, corruption, etc.

Director, General, National Pension Commission, Hajiya Aisha Dahir-Umar

   While many countries of the world, including Nigeria, have robust retirement and pension policies and structures which build pension nests for the workers, it behoves each individual worker to make sure that indeed his or her retirement fund is really there for him or her to fall back upon after your formal work-life career is over.

  In this regard eternal vigilance, to channel the words of a wise one, is the price you have to pay – now when you are still in active service – to secure your retirement in comfort. In a nutshell, workers owe it to themselves to be interested in retirement-related matters. Do not merely check your pay slip for tax deductions. Study it too for your pension contributions. Make it a habit to call at that unit of your workplace handling pension and gratuity. Check on the health of your Retirement Saving Account (RSA) with your pension service providers, periodically – read the e-mail they send to update you on your balance with them, call at a branch of their office near you, be interested in what they invest part of your pension savings on, etc.     

  The importance of creating access to retirement education for active workers so that they are prepared properly for retirement cannot be overemphasized if any country, including Nigeria, desires a pleasant post-service life for its retirees.

   This takes on an even greater significance if the nation realises that though many workers indeed retire at the statutory age stipulated by law, their existential commitments do not retire or just go away with their exit from formal employment.

  In fact, in Nigeria and across the world, studies continue to find that retirees are still caught in the web of second-stage parentage in which they are still responsible for the upkeep of their unemployed or sick adult children, grandchildren, dependent relatives, etc.

   Thus it is important to educate workers on the financial challenges they might still have to shoulder even in retirement, and prepare them to meet such challenges with minimal effort.

  It is therefore imperative for employers, labour unions and the government to deliberately spread retirement education within the workforce so as to address poor knowledge of retirement and post-career expectations among workers.

   It is important for ministries, departments and agencies (MDAs) and private sector organisation to have functional retirement units. These units should create formal structures within which workers are equipped with the knowledge of retirement education, which understanding should be refreshed in them periodically.

  It will be beneficial, for instance, to have all workers with 10 years and less to retire from formal employment exposed to retirement education at in-house pep talks, seminars, etc to which experts in the field are involved to educate these workers as resource persons, etc.

  In bears repeating that the onus is on you, the worker, to ensure that you indeed have a secure pension pot you can draw from in retirement.

   You can only do that now while you are still in active service.

 So, the question again: Workers in Nigeria, how prepared are you for your retirement?

Dr. Omotayo

Dr. Omotayo is Associate Professor of Ageing and Retirement, and Head of Department (HOD), Department of Adult &Development Education, Tai Solarin University of Education (TASUED), Ijagun, near Ijebu Ode, Ogun State. He can be reached on 08060486167.

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