Economy

December 15, 2020

Disengaged workers pension withdrawal up 11.14% to N14.97bn

Pencom, Pension

As PenCom pays N20bn to the dead

By Peter Egwuatu

ECONOMY

THE National Pension Commission, PenCom, recorded fund withdrawals by pensioners amounting to N14.96 billion through 26,458 Retirement Savings Account (RSA) holders under the age of 50 in the last nine months.

This represents an increase of N1.5 billion or 11.14 percent  from N13.46 billion by 28,268 RSA holders in the corresponding period of nine months 2019.

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The Commission also approved the payment of N20.48 billion as death benefits to the beneficiaries of 1,821 deceased employees during the nine months period ended September 30, 2020.

Vanguard’s investigation show that the number of requests to access 25 per cent RSA balances by disengaged workers has been on the increase.

The Pension Reform Act 2014 makes provision for a worker who loses his/her job to withdraw 25 per cent of his RSA, if the person remains unemployed for four months.

Information gathered from PenCom show that in the first quarter, Q1’20, the commission granted approval for the payment of N4.31 billion to 8,221 RSA holders under the age of 50 years, who were disengaged from work and unable to secure another job within four months, while that of  Q1’19  stood at N4.51 billion to 10,733 RSA holders.

In the second quarter, Q2’20, it granted for payment of N2.56 billion to 4,668 RSA holders, while that of Q1’19 stood at N5.28 billion to 10,673 RSA holders.

In the wave of job losses during the restriction caused by COVID-19 pandemic, in the third quarter, Q3’20  the number spiked to 13,569 RSA holders with approval for the payment of N8.10 billion granted, while that of Q3’19 stood at N3.67 billion to 6,862 RSA holders.

Peter Aghahowa, head of corporate communications of PenCom, said workers who lost their jobs during the coronavirus pandemic would be able to get a quarter of the savings in their RSA after four months of being unemployed.

He said it had been observed that there was an increase in job loss due to the effect of the pandemic.

“The contributory pension was designed to allow access to 25 percent of retirement savings balance in a situation whereby you lose your job,” he said.

The commission said the total value of pension fund assets stood at N11.56 trillion as of September 30, up from N11.08 trillion as of June.

A breakdown of the pension industry portfolio showed that the funds were mainly invested in federal government securities, with an allocation of about 65 percent of the total pension assets (FGN bonds: 57 per cent, treasury bills: 7 per cent, Sukuk bonds: 1 percent, while Agency Bonds and Green Bonds: less than 1percent).

Vanguard News Nigeria