Dear Retirement Savers: Feel No Shame When Asking for Help-Eric McWhinnie

                                       Source: Thinkstock

Asking for directions can be a humbling experience. Relying on others to help us reach a destination can force us to see things in a new perspective. We may realize that our current path is wrong or that others truly know more than we do. The longer we wait to admit we need help, the more we veer off course, especially when traveling toward retirement.
The reluctance to ask for help is not restricted to the road. Despite most participants saying that 401(k) plans are a “must-have” benefit from their employers, only 24 percent say they are likely to have someone help them manage their investments, according to a new survey from Charles Schwab. In comparison, 87 percent are likely to have someone change the oil in their cars.
Retirement savers need to realign their financial priorities. The average participant in the survey spent roughly the same amount of time researching and choosing investments for their 401(k) plans as they do investigating cell phones, even though retirement can last for 30 years or longer and cell phones are often traded in every year or two. Furthermore, people spend more than twice as much time researching their car purchases than they do evaluating their 401(k) investment options.
“Today, responsibility for managing their own retirement investments rests squarely on workers’ shoulders,” said Steve Anderson, head of Schwab Retirement Plan Services, in a press release. “In fact, the survey finds that nine in ten participants are relying on themselves for the money needed to live in retirement and a majority are using their 401(k) as their primary or sole source of retirement savings.”
How many retirement savers are lost? Charles Schwab found that 50 percent of participants believe their 401(k) plans are more confusing than their health care benefits, while one in three admit they feel a lot of stress when it comes to allocating their retirement dollars. Almost six in 10 wish it was easier to choose the right 401(k) investments. Yet less than one quarter of participants with access to professional advice say they use it. Among those not using advice, roughly half believe they would achieve better investment results if they did so.
“Most people see a doctor when they’re sick or a mechanic when their car isn’t running, so why not seek professional help to manage something as important as their 401(k)?” says Anderson. “In many cases, there is a significant difference between how much people need for a comfortable retirement and what they are actually saving. With all of the information providers have about 401(k) participants — age, salary, account balance, savings rate, and more – why leave them on their own, or lump them into target date funds based only on their age when so much more can be done to personalize their savings plans? We know that professional advice can play an important role in helping people save more to bridge the retirement gap.”

Culled from Wallcheatsheet

PENSION AND INFORMATION GAP IN NIGERIA.-Odunze Reginald

At the point of writing this article, there is no university or Polytechnics in Nigeria offering pension management as a course. There is therefore little or no information available on matters in Nigeria. Much has not been written on pension matters in Nigeria except few articles and reports on pension in newspapers and magazine in Nigeria.

This has created an information gap and according to Onuoha (1994:136) noted that “information is too important to be left alone or managed poorly” The world has changed, we are now in the period of hyper globalization and Nigeria cannot afford to be left behind and the pension industry should not be an exception

Pension is critical aspect of life and requires and even deeper understanding , as most retirees rely heavily on their pension contribution to be able to access the good things of life but unfortunately they feel unconcerned, about it, the result is that they have scanty or information at all  pertaining their pension contribution. Even when their employers in conjunction with Pension Fund Administrators organize forums to educate and enlighten them on pension issues, they hardly make themselves available; the result is poor turnout and wastage of man hours as they use the opportunity to go about their other business, leaving PFAs to talk to few individuals.

In a country with low reading cultures, it leaves much to be desired in that regards , as people saves for only two treason , to make lots of money  and to cater for their old age. But where the contributor does not have necessary information, nor make plans to get such information, it becomes a dismal situation and calls for a greater awareness in that regards.

The Federal Government of Nigeria has promulgated the Pension Reform Act 2014, which means a repeal of 2004 Pension Reform Act. Are the masses interested to get the basic highlights of the act, or will they continue to play the lessee fairs attitude to issues pertaining to their pension only to be interested in it during retirement.

In my article on 10 pension mistakes millions of Nigeria make, it should be noted that one of the greatest mistakes is not checking their pension pot. And at the end of their working they now discover that they need these pensions just as fish need water to survive.

The Task Environment of Pension-Odunze Reginald C

The task environment of pension looked at those basic elements that affect and influence the business of pensions in any environment. These factors are as follows:

Competitors

Customers

Regulators

Unions.

These four factors affect business of and they are regarded as the task environment .Onuoha (1994:142) and relating it to pension , it becomes the task of environment of pension.

Competition

The pension business is a competitive one, there about 24 pension administrators and about 4 pension custodians. These organizations are in the same business, a homogenous business; they compete in generation of Retirement Savings Account. What may keep them in business will be the quality and quantity of return on investment. There are insurance companies competing seriously with PFAS in the area of Annuity.

Customers

In his book “How to win customers and keep them for life” Leboeuf noted that” in today’ s service oriented economy excellent service more than a competitive weapon-it’s a survival skill. And those institutions without it run the risk of going the way of steam locomotive, the horse and buggy and the slide rule” continuing he stated that “they alone make it possible for you to earn your livelihood in the way that you do, treat them well and satisfied customers will be your best source of advertising and marketing” And according to the former Managing Director of Xerox, Hitchman, he stated that people are no longer stressing themselves but in building an enduring relationship. But when customers are not attended promptly, they tend to feel dissatisfies and unhappy.

Customers are becoming increasingly aware of their needs, desires, wants and their expectations from Pension Fund Administrators. They compare the services rendered with co workers, their return on investments, these has been on the low ebb as the transfer window is not yet opened.  These service expectations include the following:

Accessing of benefit within the shortest possible time, 

Good and adequate return on investment

Prompt delivery of Retirement Savings Account statements

Being attended to within few minutes.

Regulators

“Regulators are units in the task environment that has the potential to actively control, regulate or influence organizations policies and practices” Onuoha (1994:144)

There are two main regulators, government agencies and interest groups in the pensions industry, the major regulator is the National Pension Commission PenCOM, Central Bank of Nigeria, and the Security and Exchange commission SEC in the area of Investments.

Union : Union include the Nigeria Union of Pensioners NUP, The Nigeria Labour Congress, Trade Union Congress, Nigeria Employers Consultative Association NECA,

These unions have large followers and heavily organized, and can definitely mobilize for or against Pension Fund Administrators.