Pension Plan: Why you need to secure for your future.

Pension Plan: Why you need to secure for your future.

Eunice Ogba, 55, an Educationist who is the headmistress of a primary school in Enugu, and her husband — a freelance Pastor who will be turning 60 later this year — hadn’t done anything, before last year, to prepare for their financial future. “My husband and I mentioned the topic in passing only a few times, saying we’d set up a Savings fund when we could afford it,” she remarks. But they never got around to it — until they saw what Eunice’s parents went through.

Last December, her 77-year-old father became seriously ill not long after her 74-year-old mother suffered a massive rheumatism and partial stroke. “My siblings and I soon learned that there is barely any type of medical help available for the elderly in Nigeria” Eunice says. After consulting with a social worker and their family doctor, they decided to use all of her father’s savings to pay for his medical expenses. But soon after, he took a turn for the worse — and passed away in late March of this year. His wife, Eunice’s mother, was left without enough money to continue living on her own, so she had to move in with Eunice’s brother.

Now, Eunice wishes she had started thinking about her retirement much earlier. “Until a couple of years ago, retirement seemed to be in the distant future, not something I needed to be concerned with,” Eunice says. “I hope I can keep working for at least another 10 years, maybe longer. But at the same time, I’d like to work because it’s what I choose to do, not because I have no choice.” Eunice said.

Does the story above look like a typical story you have heard before? Pension is not a requirement it is a necessity, a cushion to fall back on when the joints ache, when the hips break and when the eyes grow dim. And I will expand on reasons why you need a pension plan.

  1. when people are about to retire they will experience a reduction in income – a pension plan makes up for some of this loss of income in retirement;
  2. In order to encourage it the Government provides tax relief on contributions made to pension schemes and the growth in their investments.
  3. Group pension plans may also benefit local businesses in your Locality. This is because when you receive your pension check, you probably don’t stuff it under your mattress—you spend it in your local economy. And the business where you make that purchase sees a boost in its profits. This means that they may be able to expand their business or even hire more workers.Who is Eligible for a Pension Plan?Most of the frequently asked question is usually centred on who is eligible for a pension plan? Or how can I begin to set up a pension plan? So here are some criteria that is needed to qualify for a pension plan.
    • If you are a worker working in the public sector then these contributions are mandatory
    • If you are a worker in a private company with over 15 workers, then these contributions are mandatory.
    • If you are worker in a private company with less than 3 workers (or are self-employed), then you are entitled to participate in the scheme subject to Pension Commission guidelines
    • However if you are a worker in a private company with more than 3 workers, and less than 15 workers…the law is sadly silent on your status.
    • Having a pension plan is one of the most secure insurance policies for your future upon retirement, and it is important that when you are about to start a new job, you ensure that a pension plan is part of your package.

Written by Lynda

 

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