INTERVIEW: We’re providing pension services to help individuals build financial security for retirement, says Christopher Bajowa, CEO of FCMB Pensions

FCMB Pensions, a subsidiary of FCMB Group Plc, is a major player in the Nigerian Pension Industry. In an interview with Usman Lawal, the Company’s Chief Executive Officer, Christopher Babatunde Bajowa, discusses the company’s history, growth, impact and commitment to providing pension services that support individuals in building financial security.

FCMB Pensions has unarguably been a major player in Nigeria’s Financial Sector. How has the company supported economic growth and stability through its operations?

As you know, we commenced operations in 2005 as Legacy Pension Managers following its licensing by the National Pension Commission (PenCom) in line with the provision of Pension Reform Act 2004. Over the past 19 years, the company has transformed and undertaken two major acquisitions. The first was the FCMB Group’s acquisition of a major stake in the former Legacy Pension Managers in 2017. In 2022, we completed the acquisition of AIICO Pension Managers, successfully integrating it into our operations that same year. These strategic moves demonstrate our focus and commitment as a leader in the Nigerian pension industry.

We provide pension services and contribute to the broader financial markets and the economy. With Assets Under Management (AUM) of about ₦900 billion and over 750,000 clients, we mobilize long-term savings that can be channelled into productive investments through various financial instruments providing much-needed capital for economic development. By investing in these instruments, FCMB Pensions contributes to the liquidity, price discovery, market stability, and overall growth of the Nigerian financial market.

What societal benefits has FCMB Pensions brought to pensioners and the broader community?

As one of Nigeria’s leading Pension Fund Administrators, we provide financial stability and security to pensioners, ensuring they have a steady flow of income during retirement. FCMB Pensions helps pensioners grow their savings through diversified investments, maximizing their retirement funds.

As at today, FCMB Pensions has paid over ₦137 billion to more than 56,000 retirees and other beneficiaries. The beauty of the Contributory Pension Scheme (CPS) includes its ability to take care of retirees despite depleting the balances in their Retirement Savings Account (RSA). Currently, we are paying about 43 retirees that fall in this category through pension protection fund in line with regulation. These payments have impacted the society by reducing old age poverty, driving financial inclusion, and ensuring retirees enjoy financial security.

We conduct regular customer fora to educate pensioners and contributors about the Nigerian pension industry, empowering them to make informed decisions about their Retirement Savings Accounts. We have provided multiple channels that customers can use to view balances, monitor the growth of their funds, and interact with their relationship Officers for improved service delivery.

Social welfare is vital for responsible organizations in Nigeria, and FCMB Pensions is making positive impact in that regard.

Could you share some of the initiatives or programs FCMB Pensions has implemented to enhance social welfare in the country?

As a responsible corporate citizen, FCMB Pensions places a strong emphasis on promoting social welfare including Corporate Social Responsibility (CSR). Our efforts include donations to orphanage homes and Internally Displaced Persons Camps, visiting correctional centres in Keffi, Nasarawa State, and Abuja, where we facilitated the release of inmates who had been held without trial for extended periods. We have supported youth sport programs for different age categories in various locations including Lagos, Abuja, Jos and Port Harcourt.

As a Pension Fund Administrator that promotes impact investing, we have invested in areas such as education, healthcare and infrastructure through our asset allocation to instruments issued by relevant institutions in these areas.

These initiatives have been well-received and have promoted our efforts to foster inclusive and sustainable growth in the communities we serve.

Could you tell us some of the major milestones FCMB Pensions has achieved in the past year? Are there any notable commercial achievements or strategic developments you would like to highlight?

From a humble beginning in 2005, we have consistently grown our customer base and Asset Under Management. Currently, we have over 750,000 RSAs under our management covering public and private sectors including some States employees under the CPS. Our growth in Assets Under Management has been impressive, increasing from ₦22 billion in 2008 to about ₦900 billion currently. We are incredibly proud of this achievement. We are a top player and focused on reaching a trillion Naira in AUM by early 2025.

In the area of Benefits payments, we have paid over ₦133 billion since inception to over 56,000 beneficiaries in term of pensions, Death Benefits and temporary access. We have facilitated payment of over ₦3 billion in equity contributions for residential mortgage to more than 350 beneficiaries. This makes us a key player in enabling our customers own homes while working in line with Regulation.

Could you discuss any ongoing projects or initiatives that FCMB Pensions is currently focusing on and how these projects align with the company’s long-term goals?

We have embarked on an IT transformation program to further leverage technology across our operations. This will improve our efficiency, productivity, and enhance the speed and accessibility of our services for clients, even those in remote areas.

As I mentioned, we are implementing additional changes to our operations and strategic priorities to ensure superior investment returns for our Retirement Savings Account (RSA) holders.

Cybersecurity is a key area of investment, as we are committed to protecting our contributors’ funds and ensuring the security of our operations. We have earned the Nigeria Data Protection Regulation (NDPR) Audit Compliant badge for Data Privacy for two years running (2022 and 2023) as we continue to implement deliberate measures in ensuring our customers’ data privacy and protection.

Human Resources transformation to meet our needs remains a top priority. We consistently invest in capacity building, employee well-being, and creating growth opportunities within the organisation. In fact, we’ve received multiple awards, including recognition from Pension Operators Association (PenOp) – the umbrella body of pension operators, for our exceptional training and development programs.

What measures has FCMB Pensions taken to improve pensioners’ access to their funds and their overall experience?

We have various platforms where pensioners can interact with us including dedicated phone lines, mobile app, client portal on our website, and social media channels. But more importantly, we are focused on enlightenment, where we educate retirees through sensitization sessions (physically and virtually), and update them on latest developments in the industry. These platforms also serve as medium to obtain feedback from our customers to improve on service delivery.

Additionally, we have enhanced the overall experience of our retirees through payments of retirement benefits as and when due. Typically, we ensure our retirees receive their monthly pension benefits on or before 18th of every month.

How has FCMB Pensions galvanised its resources to remain a top player in your industry, especially factoring in the heightened economic challenges Nigeria is currently facing?

The current business environment is challenging, with companies facing impacts of rising energy costs, currency devaluation, and rising inflation, we focus on priority areas that will deliver value to all our stakeholders, particularly our clients. We are prioritizing investments that will enhance service delivery and significantly improve customer experience.

Despite these economic challenges, we have taken deliberate steps to drive customer engagement, improve Return on Investment (ROI), leverage technology to reduce operating costs, staff capacity building through training, institute hybrid work system, and promote effective service delivery.

With rapid technological change, how do you see the pension industry evolving in the next 5-10 years? What role will FCMB Pensions play?

Considering the recent radical changes in the Nigerian economic landscape, focusing on the immediate to near future is more practical. I can confidently say the industry is entering a new phase. We anticipate expanded coverage and inclusion through Micro Pension Plan for informal sector workers, more states adoption, enhancing alternative investment opportunities, and technological enhancements. Beyond technology, we are also exploring diaspora participation and hope to gain access to more asset classes, especially those linked to foreign exchange, which can mitigate the impact of devaluation and potential inflation. We know our Regulator (PenCom) are doing a lot in this regard.

We will continue to implement strategies to position ourselves as industry leaders, providing personalized pension services to our clients. Technology will remain a key focus, as it significantly improves our efficiency and makes access easier to our clients.

What are the strategic priorities and plans for FCMB Pensions in the coming years?

Strategically, FCMB Pensions is positioned to take advantage of growth opportunities in the pension space through organic and inorganic channels. We have demonstrated this in the past and we will always be relevant in shaping the future of the industry.

As I mentioned earlier, technology will play a vital role in our growth trajectory, we will continue to enhance our competitiveness in the area of investment returns. As a customer centric organisation, continuous customer engagement will always remain a priority as we are positioned to retain our customers and attract more through the transfer window space by providing superior customer experience via our service channels and competitive ROI. Also, investing in capacity building of employees is fundamental to driving productivity and continued success.

What is your perspective on the current state of the Nigerian Pension management industry?

There have been a lot of achievements in the industry. The Regulator – PenCom, has done a lot to develop this industry, particularly in terms of stability, risk management, and promotion of ethical behaviour. However, there are still areas where we can improve. For instance, there is a need for more adoption of technology in how we operate. Also, the value of our pension assets as a country is proportionately lower when it is compared to peers, so also is the pension asset to GDP ratio.

A lot of work still needs to be done, but we know that the regulator is working very hard to focus on the areas that need attention. It is still a young industry, and we believe that the future is bright. We have learned a lot in the last twenty years.