No fewer than 15,634 workers who retired under the Contributory Pension Scheme and could not earn up to N10,000 monthly stipends withdrew N7.79bn funds in their Retirement Savings Accounts with their respective Pension Fund Administrators in one year.
According to figures obtained on the National Pension Commission’s quarterly report on enbloc payments to the retirees, they were those who had less than N1.6m in their RSAs, withdrew the total and exited the CPS from the second quarter of 2022 to end of first quarter of 2023.
They joined 133,738 retirees who had earlier exited the CPS for having less than N550,000 as their RSA balance when they retired.
PenCom had earlier granted approval for the payment of the entire RSA balances of retirees whose RSA balances were N550,000 or below and considered insufficient to procure a programmed withdrawal or annuity of a reasonable amount over an expected lifespan.
This made the total number of retirees who had exited the CPS to hit 149,372, with a total of N41.3bn returned to them.
The 149,372 figure comprised of 7,584 Federal Government, 4,203 state governments and 137,585 private sector retirees.
According to PenCom’s reports, “In the second quarter of 2022, approval was granted for enbloc payment of retirement benefits to 3,369 retirees, which totalled N1.45bn. These were retirees whose RSA balances could not provide a monthly pension of at least one third of the prevailing minimum wage (i.e. N30,000).
“In the third quarter, approval was granted for enbloc payment of retirement benefits to 4,529 retirees, which totalled N2.40bn. These were retirees whose RSA balances could not provide a monthly pension of at least one third of the prevailing minimum wage (N30,000).
“In the fourth quarter, approval was granted for enbloc payment of retirement benefits to 3,677 retirees, which totalled N1.56bn. These were retirees whose RSA balances could not provide a monthly pension of at least one third of the prevailing minimum wage (N30,000).”
It added that, “In the first quarter, 2023, approval was granted for enbloc payment of retirement benefits to 4,059 retirees, which totalled N2,54bn. These were retirees whose RSA balances could not provide a monthly pension of at least one third of the prevailing minimum wage (N30,000).”
In 2022, PenCom said new retirees who were entitled to less than N10,000 monthly pension at retirement could take the total money in their RSAs.
PenCom reviewed its regulation on enbloc payment to retirees, and allowed retirees with less than N1.6m at retirement to withdraw all the balance in the retirement instead of being on monthly payment.
It stated, “There is a new regulation that says if your RSA balance cannot provide one-third of the minimum wage, you are allowed to go with the balance in your account.
“If your monthly pensions is not up to N10,000, which is a third of the N30,000 minimum wage, you can take all your saving”
The pension industry’s regulator explained that due to the reduction in the value of the money, it decided to review the enbloc amount which would amount to about N1.6m.
PenCom had decried the attitude of employers notorious for withdrawing pension savings from workers’ monthly stipends but not remitting into their RSAs.
This had worsened the plight of workers who had continued to retire with ridiculously low amounts in their RSAs.
PenCom stated that, “The commission continued to maintain the services of recovery agents for the recovery of unremitted pension contributions and penalties from defaulting employers.
“Demand notices were issued to defaulting employers whose pension liabilities were established by the recovery agents. During Q1, 2023, the sum of N384.28m comprising principal contributions (N193.06m) and penalties (N191.22m) was recovered from 34 defaulting employers.
“Meanwhile, 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 N24.53bn comprising of principal contributions (N12.44bn) and penalties (N12.09bn) was recovered from defaulting employers.”
Madukwe B. Nwabuisi is an accomplished journalist renown for his fearless reporting style and extensive expertise in the field. He is an investigative journalist, who has established himself as a kamikaze reporter.
