PenCom boasts of paying pension of 425, 279 retirees as and when due
By Eberechi Obinagwam
The National Pension Commission (PenCom) has said that 425, 279 retirees are receiving pensions as and when due under the Contributory Pension Scheme (CPS), from inception to 31 December, 2022.
Director General of PenCom, Aisha Dahir-Umar, disclosed this on Thursday, at a Workshop organised by the Commission for Labour Writers Association of Nigeria (LAWAN) with the theme; “Securing the Future: The Benefits of the Contributory Pension Scheme to Nigerian Workers.”
CPS was introduced to allow Retirement savings account (RSA) holders to utilize a portion of their retirement savings as equity for residential mortgages.
The DG who was represented by PenCom Head of Communication, Abdulquadri Dahiru in her paper presentation, said through programmed withdrawal, 319, 833 retirees received N908.04 billion as lump sum and N14.18 billion as average monthly pensions.
“105, 446 retirees were paid N194.12 billion as lump sum from annuity, N 595.43 billion as premium that provides an average monthly pension of N6.25 billion, while N328.05 billion was paid to death benefits with the beneficiaries and administrators of 86,610 deceased contributors,” she said.
She said, in line with section 13 of the Pension Reform Act, (PRA) 2014, a total of 34, 283 RSA were transferred in the first week of January 2023 valued at N131.79 billion.
According to her, from January 1st to 31 March 2023, a number of 28,112 RSA transfer request were submitted by PFAs on behalf of RSA holders, out of which 24,985 request were concluded in the frist week of April 2023 explaining that the scheme implemented 2 editions of Pension Enhancement in December 2017 and February 2020.
“64,076 retirees pension increased with N303 million and 86, 108 retirees Pension increased with 444 million. Respectively, third edition ongoing (1 February – 31 July 2023),” she said.
She disclosed that inadequate funding of past pension liabilities (Accrued Rights) as regulatory challenges, explaining that the Retirement Benefits Bond Redemption Fund Account maintained at CBN has not been adequately funded towards the settlement of the accurate rights of retirees of FGN treasury Funded agencies.
While nailing on Agitations, risk of policy reversals, she said the challenges of Pension adequacy under the CPS has given rise to clamours by some government agencies to be exempted from the CPS and demands by some individuals to take up to 75 per cent of their RSA balances as lump sum, leaving little or nothing for monthly pensions.
She stated that the 9.95 million registered members as at 31 March 2023 falls far below the 46.49 million workers in formal employment in Nigeria as at 31 December 2021, according to the National Bureau of Statistics. She said many employees in the private sector and their informal sector are yet to come under the CPS.
Dahir-Umar, said PenCom is committed to protecting workers’ interests and ensuring employers pay pension contributions as and when due.
She said, ”During the first quarter of 2023, N384.28 million, comprising contributions of N193.06 million and penalties of N191.22 million, was recovered from 34 defaulting employers. Meanwhile, from the commencement of the recovery of pension contributions owed workers in June 2012 to 31 March 2023, the Commission has recovered N24.53 billion (contributions of N12.44 billion and penalties of N12.09 billion) from defaulting employers.”
TheNiche reports that one important aspect of Contributory Pension Scheme (CPS) that benefits workers who lose their job, as an RSA holder, an employee can access 25% of their RSA balance to help cushion the effect of unforeseen job loss if they cannot secure another employment after four months.
Also, Head, Micro Pension Department, PenCom, Dauda Ahmed while delivering his paper on Facilitating Financial Inclusion in the Informal Sector through the Micro Pension Plan, (MPP) said, the policy was introduced to achieve a 40% Pension Participation, and to ensure that informal sector workers have an opportunity to save for their old age.
He said the policy will improve the standard of living of the elderly as it provides a regular stream of benefits at old age.
He said the lack of adequate incentives to encourage participation has been one of the challenges to the implementation of the scheme.