Business

April 18, 2024

Unemployment, hardship force rise in number withdrawing  from pension savings

pension

By Rosemary Iwunze

In apparent response to the rising economic hardship in the country, the number of disengaged workers that withdrew money from their pension savings for sustenance increased by 33.9 per cent in the fourth quarter of 2023, Q4’23.

According to the Q4’23 report released by the National Pension Commission, PenCom, 10,299 Retirement Savings Account, RSA, holders that lost their jobs, withdrew from  their pension savings in Q4’23, up 33.9 percent from 7,688 of such withdrawals the previous quarter, in Q3’23.

In Q4’23, the 10,299 RSA holders withdrew N6.5 billion from their pension savings against 7,688 RSA holders that withdrew N8.6 billion in Q3’23.

The Pension Reform Act permits disengaged workers to withdraw 25 per cent of their pension savings four months after losing their jobs.

The report stated: “In Q4’23, a total of 10,307 RSA holders requested to access 25% of their RSA balances due to temporary loss of employment. Out of that, 10,299 RSA holders’ requests were approved, while eight were rejected because their ages were above 50 years.

“Out of the 10,299 applicants whose benefits were approved, 9,819 were from the private sector, while the remaining 480 were from the public sector. The sum of N6,504.96 million was approved for the 10,299 RSA holders under the age of 50 years.”

The report further states that: “In Q3’23, a total of 7,697 RSA holders requested to access 25% of their RSA balances due to temporary loss of employment. Out of this figure, 7,688 RSA holders’ requests were approved, while nine were rejected because their ages were above 50 years. From the 7,688 applicants whose benefits were approved, 7,242 worked in the private sector, while the remaining 446 worked in the public sector. The sum of N8,628.27 million was approved for the 7,688 RSA holders under the age of 50 years.”

Meanwhile, on contributions for residential mortgage, the report stated: “A total of 1,128 RSA holders requested to access up to 25% of their RSA balances towards payment of equity contributions for residential mortgage during the quarter under review. Approvals were granted to 991 requests amounting to N9,618.74 million, while 137 were rejected due to incorrect documentations. Out of the 991 applicants whose benefits were approved, 304 were from the private sector, while the remaining 687 were from the public sector.”