Why don't you have a pension plan? Here are four good reasons

So you don't have a pension right now and you're wondering what it's all about anyway. A pension plan is a secure way to save for retirement while you work so that you can maintain a decent standard of living for you and your loved ones when you retire. 

The law says everyone who works must have a pension plan so they can put something aside for the future and have enough money for the things they want when they're not really working any more. It's really in your interest to have a pension plan. 

Your Retirement Savings Account is actually one of the most important accounts that any worker can have. 

So now here are five reasons you don't have a pension plan currently and what you could do about that. 

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1. You're not a government worker

Civil servants normally get pension and other retirement benefits, and you're almost certainly in line for a pension if you are working with the government. So if you don't have a pension plan, it means you're probably not working in the public sector.

But there are a lot of businesses in the private sector that give their staff various retirement benefits and also pay pension from their staff's pay to their pension administrator on behalf of their staff. You need to speak with your employer to find out what benefits you'll qualify for when you retire or if you get laid off. Also find out if your company remits staff pension to their pension firm as directed by law and if they don't, see what you can do to make them start complying.

2. You work for a small company with no pension.

Big companies offer good benefits for their employees when they retire and you probably don't have a pension plan right now because you work for a small company with no pension scheme. Many small companies try to evade remitting pensions under the Contribution Pension Scheme (CPS) which the law mandates for businesses with three or more employees, and this affects you too. But you can change that.

There are 21 pension operators in the country. Go to the PenOp website (www.penop.com.ng) to check out the pension operators online and find one to talk to and sign up for a pension plan. All you need to do then is to notify your boss about the your retirement account and give them your pension firm's details, so they'll be deducting a part of your pay and sending them to your pension administrator. This money goes into your retirement savings account and your pension firm will keep you informed on a regular basis about how your money is doing. The Association of Pension Fun Operators, PenOp even recently introduced a online payment system that makes it a lot easier for employers, especially small business owners, to remit their employees' pension payouts to their firm without going anywhere or filing lots of paperwork. It's secure and convenient. Talk to your boss and a pension administrator today to dig in on that.

3. You do your own thing

There's a lot of people who run their own business. Many others also don't really have a regular job or work full time. They work as contractors or consultants, carrying out an assignment for one client and then moving on to the next one. So the clients don't pay them a pension because they're not really staff and so they don't qualify. They just pay them off for the services they render and that's usually it.

If you're like this, you can still work things out for yourself. You don't have to be employed with a company to have a pension plan. You can personally sign up for one with any pension administrator you choose and still get the same retirement saving benefits. Search for pension firms online and discuss your options with them.

4. You don't work long term

Most employers lay out their pension plan in a way that aims to reward employees who stick with them long term, not those who want to move on to the next one before they've really made a mark in the current workplace. That's why most people who hop from job to job don't really get any retirement benefits out of anywhere they've worked.

Depending on your career goals and personal preference, it's usually a good idea to work for a decent amount of time with a good firm and not switch jobs every year. This sends a message to your employer that you're in for the long run and that way you can rake in a decent payout and get the most of their retirement plan when it's time to leave.

However, you should know that switching jobs doesn't mean you're going to lose the money you've saved towards your retirement in your current workplace. You simply notify your pension firm to update your records of the new employment and your new boss when you switch jobs and then you can save on from where you left off.

Your pension moves with you when you transition from job to job, and when your pension firm confirms your new employment, your new boss can remit your pension from your pay to your RSA with the pension administrator and everything moves on like before. You don't get to lose a single naira out of your retirement savings no matter how many times you make these transitions.