BasseyUbong

YOUR ANNUITY MATURES – PLANNING FOR RETIREMENT OR INVESTING.

In the late 70s to early ’80s, I worked at Ogoja in Cross River State in a high office. I bought a Monopoly game and friends flocked to No. 3 Calabar Street where I lived to learn and to play the game. I preferred playing the banker, presaging my stint in Icon Merchant Bank five years later. It is from that game, first developed by Lizzie Maggie in the USA in 1903 as “Landlord’s Game” and redesigned by Charles Darrow in 1932 and published in 1935 as “Monopoly” that I learned the term “annuity.” But it was in 2018 that I read and understood what annuity means and implies.

Probably the world’s best board game, Monopoly is about real estate deals with players trying within 180 minutes maximum to win by making other players bankrupt. The game is exciting and requires concentration, ability to negotiate, and good business sense. If you hate idleness or you are under stress, take on this game and you can be engaged for 20 hours in a day without one minute of boredom.

Why this story? A consultancy firm engaged me to prepare a paper for staff about to retire in a company. I recalled annuity, read about it, and wrote the paper including several other issues that workers about to retire should think about (incidentally the company played dice or ‘ojoro’ with me, took the paper, and stopped taking my calls since June 2018 – fast guys but folks I know are clever by halves).

Annuity is an insurance product. It is a form of investment more common in lessons for workers that are about to retire but an investor can make a deposit or deposits to mature in future or in a short while for business investment.

As a pension plan, the annuity is based on a lump sum deposited or periodic deposits from which an individual is paid an agreed amount periodically (monthly, quarterly, annually). If a reputable insurance company is used, the money is invested and the original sum plus earnings are paid to the investor from the agreed date for a period or for life. It is expected that workers go for an annuity as one option in preparation for retirement. Recall that your primary school teacher taught you not to put all of your eggs in one basket. I did so via National Pension Commission (PenCom) and now I am living on dole-outs from family and friends. Learn from my bitter experience. With a government pension plan, you only receive paper balances and request for confirmation of your birthday from your Pension Fund Administrator (PFA).

As an example: if you determine that your minimum recurrent expenditure per month is N100,000; this implies N1,200,000 for one year. You can raise this through workers Cooperative Society in your organization or through savings (if you can save). Place that amount with a reputable insurance company and tell them when to commence payment. If you have been contributing to a PFA through a Pension Fund Custodian, payment starts between 12 months to 24 months after retirement. If the upper limit is your luck (there is no template in PenCom) then deposit N2.4 million to be sure you don’t become an emergency beggar. Good insurance companies are more reliable than the Federal agencies in charge of pension. I think PenCom is indeed about Monopoly – the agency wins while workers go bankrupt.

Therefore, start today so that your annuity matures at most one month after your regular salary is stopped. Get more facts from a reliable insurance company with an excellent track record. Avoid touts for this is about your life; it is about your loved ones. As you learned in primary school, a stitch in time saves nine. Because we don’t care about statistics and research in Nigeria, there is no way of knowing how many retired workers are lost to hunger and frustration while waiting for pension and how many children drop out of school or go into drugs and crime and prostitution because their retired parent or guardian can no longer meet the basic necessities of life for them.

For me, I share knowledge and experience because the Scripture says if you know what is good yet you don’t do it, it is counted as a sin against you (James 4:17). Forward to colleagues, family, friends, members of your club and religious organization. If they fail to act, don’t give them relief when they come cap in hand after retirement. Knowledge is power; it is also survival and wellbeing.  I rest my case.

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