Pension registration down 10%, as interest in CPS declines

Pension contribution

Pension registration down, PenCom still engages Recovery Agents

By Jeph Ajobaju, Chief Copy Editor

New enrolment for Retirement Savings Accounts (RSAs) dipped from 93,114 in the first quarter of 2022 (Q1 2022) to 83,654 in Q1 2023, a 10.2 per cent dip year-on-year (YoY) reflecting decline in interest in the Contributory Pension Scheme (CPS).

But the National Pension Commission (PenCom) said it is still engaging Recovery Agents (RAs) to recover unremitted pension contributions and penalties levied against defaulting employers.

“Demand notices were issued to defaulting employers whose pension liabilities were established by the Recovery Agents,” PenCom said in its Q1 2023 report, per Vanguard.

“During the quarter, the sum of N384,280,651.48 comprising principal contributions (N193,058,483.56) and penalties (N191,222,167.92) was recovered from 34 defaulting employers.

“Four defaulting employers were forwarded to the Commission Secretariat/Legal Advisory Services Department for prosecution.

“From the commencement of the recovery exercise in June 2012 to 31 March 2023, a total sum of N24,533,339,305.09 comprising of principal contributions (N12,440,682,240.91) and penalties (N12,092,657,064.18) was recovered from defaulting employers.”

The report said Stanbic IBTC continued to maintain the largest market share of 28 per cent with 23,586 new RSA registrations in Q1 2023 among Pension Fund Administrators (PFAs).

Stanbic was followed by Access Pensions Limited which had 11 per cent market share with 9,546 new registrations; ARM Pension Managers Limited came third with 9.2 per cent market share worth 9,546.

Leadway Pensions had  8.8 per cent market share with 6,430 new registrations, and Premium Pension Limited got 7 per cent worth 6,044.

The bottom two positions were occupied by Nigerian University Pension Management Company with 179 new RSA registrations (0.1 per cent of total), and NPF Pensions Managers with 131 or 0.001 per cent.

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Pension assets reach N15.58tr as N24.53b is recovered from defaulting employers

Pension assets reached N15.58 trillion in March, buoyed by N12.44 billion PenCom recovered from employers owing their employees in pension contribution plus N12.09 billion as penalties.

PenCom Director General Aisha Dahir-Umar disclosed the sums at the 2023 Labour Writers Association of Nigeria (LAWAN) Workshop in Lagos.

Dahir-Umar, represented by PenCom  Head of Corporate Communications, Abdulqadir Dahiru, said the recovery was done between June 2012 and March 2023.

“During the first quarter of 2023, N384.28 million (comprising N193.06 million contributions and N191.22 million penalties) was recovered from 34 defaulting employers.

“PenCom is committed to protecting workers’ interests and ensuring that employers pay pension contributions as and when due,” Dahir-Umar pledged.

Payment of benefits

Dahir-Umar stressed PenCom is committed to ensuring workers receive their retirement benefits in time, as meticulous regulation and supervision of the pension industry facilitate the growth of both pension assets and CPS membership.

Her words: “The value of pension assets stood at N15.58 trillion as at March 31, while CPS membership was 9.95 million.

“In 2022, PenCom launched a policy allowing Retirement Savings Account (RSA) holders to utilise a portion of their retirement savings as equity for mortgages.

“The policy marked a significant milestone in the Commission’s ongoing efforts to provide greater flexibility and access to pension funds for the benefit of RSA holders.

“We recognise that many individuals face challenges in securing adequate housing upon retirement, and we aim to address this issue by unlocking the value of their pension savings to facilitate home ownership.

“Under this new policy, RSA holders who have contributed to their accounts for at least five years and met specific eligibility criteria can utilise up to 25 per cent of their pension savings as equity contribution towards acquiring residential properties.”

Dahir-Umar said the new policy aligns with the commitment PenCom to ensuring pension funds catalyse economic development and social well being.

Under the new policy, RSA holders can access 25 per cent of their RSA balance if they cannot secure another employment after four months of job loss, as partial withdrawal from RSA is to offer immediate support during a difficult period.

The remaining balance in the RSA will continue to grow and accumulate until the RSA holder attains retirement age.

Jeph Ajobaju:
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