The Pension Fund Operators Association of Nigeria (PENOP), has commended the National Pension Commission (PENCOM) for its recently released guidelines on mortgage policy.
PenOp’s commendation was contained in a statement signed by its President, Oguche Agudah on Wednesday in Lagos.
Recall, PenCom recently approved 25 percent for Retirement Savings Account (RSA) holders who are in active employment to pay for equity contribution for Residential Mortgage.
The association said, while there might be some initial teething problems in its implementation, it is excited and primmed to partner with the commission, RSA holders and other stakeholders to ensure that the policy actualizes the reason for why it was set up.
It said, the policy was 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”, it added.
The association also expressed believe that the policy would create massive jobs for artisans and blue collar workers involved in the construction value chain and also further open up wealth management and financial planning industry.
It said, “RSA holders will now begin to plan towards a target RSA balance because they have a goal of owning a home.
“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”, it said.
The association encouraged those in self-employment 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. The effects are catalytic and will help to galvanize various sector of the economy.
“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 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”, PenOP said.