23,673 disengaged employees withdraw N33bn from pension financial savings – PenCom

 The Nationwide Pension Fee has disclosed that 23,673 disengaged employees withdrew a complete of N33.43bn from their Retirement Financial savings Accounts within the third quarter of 2024.

The withdrawals had been made underneath the provisions of the contributory pension scheme, which permits employees who lose their jobs to entry as much as 25 per cent of their pension financial savings after 4 months of unemployment.

Knowledge from the most recent Pension Business Data Dashboard for Q3 2024 exhibits a decline within the variety of unemployed contributors withdrawing from their pension financial savings in comparison with earlier years.

In 2023, 39,470 contributors withdrew N35.48bn, reflecting a big drop within the variety of candidates and the full quantity accessed in 2024.

In 2022, 40,707 unemployed contributors withdrew N27.78bn, whereas in 2021, 40,858 people accessed N20.86bn.

In 2020, 31,716 employees withdrew N17.39bn, exhibiting a gentle improve in withdrawals earlier than the decline in 2024.

Nevertheless, the determine for 2024 was as of September, which signifies that the determine could probably improve by the top of the yr.

For the reason that inception of the contributory pension scheme, a complete of 176,424 disengaged employees have accessed their pension financial savings, withdrawing a cumulative N134.94bn.

On such a withdrawal, PenCom famous, “Any worker who voluntarily retires, disengages or is disengaged from employment earlier than the age of fifty years and desires to withdraw an quantity not exceeding 25 per cent of his RSA stability shall solely achieve this after 4 months if he/she is unable to safe one other employment.”

The report additionally highlighted continued development in pension participation, with the variety of registered Retirement Financial savings Accounts reaching 10,536,088 as of the third quarter of 2024.

This marks a 13.93 per cent improve over the previous 5 years, up from 9,215,788 in This fall 2020.

Within the year-to-date interval for 2024, 118,339 new RSA registrations had been recorded, reflecting rising consciousness and adoption of the pension scheme.

The info additional revealed that 61 per cent of RSA holders are male, whereas 38 per cent are feminine, indicating a gender hole in pension enrolment.

Cumulative pension contributions because the launch of the contributory pension scheme stood at N10.97tn as of the third quarter of 2024.

The general public sector accounted for N5.71tn, whereas the personal sector contributed N5.25tn.

Public sector pension contributions have risen from N3.43tn in 2019 to N5.71tn in 2024, whereas personal sector contributions elevated from N3.27tn to N5.25tn over the identical interval.

The regular rise in contributions highlights the continued growth of the pension business and elevated compliance with pension remittance laws, though considerations persist about some employers failing to fulfill their obligations.

The report additionally confirmed that whole lump sum funds for retirees stood at N504.86bn, whereas month-to-month programmed withdrawals amounted to N5.70bn as of Q3 2024.

Within the Retiree Life Annuity scheme, which gives pension funds by means of insurance coverage firms, whole premiums paid reached N689.4bn.

The annuity system continues to function a monetary buffer for retirees, guaranteeing common payouts.

The en-bloc pension withdrawal possibility, which permits retirees with low RSA balances to withdraw their total financial savings directly, recorded 11,330 retirees withdrawing N26.85bn within the third quarter of 2024.

This highlights the problem of low pension balances, notably amongst casual sector employees and people with irregular contributions.

The Micro Pension Plan, designed for casual sector employees, recorded 164,031 individuals as of Q3 2024.

The entire quantity saved in micro pensions stood at N967.19m, marking a rise of N878.07m from the 2020 determine of N89.13m.

The variety of casual sector employees with funded RSAs was 12,241, exhibiting sluggish however regular development on this phase.

The pension system has additionally seen elevated flexibility, as RSA holders are actually allowed to switch their pension accounts from one Pension Fund Administrator to a different.

As of Q3 2024, 289,545 RSA transfers had been processed, with N1.26tn transferred because the inception of the scheme.

In 2024 alone, 67,146 RSA holders switched PFAs, transferring N391.61bn, exhibiting that contributors are actively searching for higher returns and repair suppliers for his or her retirement financial savings.

The report additionally detailed funds associated to accrued pension rights, which cowl authorities workers who had been in service earlier than the contributory pension scheme commenced in 2004.

In 2023, 14,873 beneficiaries acquired N61.71bn, whereas 11,551 beneficiaries had been paid N54.66bn in 2022.

Over the previous 4 years, the federal government has disbursed N236.54bn in accrued rights funds.

The pension business additionally recorded N82.22bn in dying advantages paid to the beneficiaries of deceased RSA holders in Q3 2024.

Voluntary contributors withdrew N54.98bn through the interval. Underneath a separate provision, RSA holders can use a portion of their pension financial savings for mortgage fairness contributions.

As of Q3 2024, 9,080 RSA holders had used N79.74bn for this objective, enabling them to use a part of their pension stability in direction of homeownership.