Featured Pencom

114,837 retirees collected N28.46bn, quit pension scheme – Report

Many workers whose employers did not adequately fund their Retirement Savings Accounts and retired with balances less than N550,000 have collected their contributions and left the Contributory Pension Scheme, NIKE POPOOLA reports

As of the end of June 2020, about 114,837 workers who retired after attaining the age of 50, and had less than N550,000 had left the Contributory Pension Scheme.

This comprised contributors in the federal, state and private sectors.

Quarterly figures on the operations of the CPS obtained from the National Pension Commission on Friday revealed that these retirees had withdrawn N28.46bn since inception of the scheme till June.

According to PenCom, 6,561 retirees who left the CPS were from the Federal Government sector, while 3,879 and 104,397 were from the state and private sectors respectively.

Some of those who collected the funds also included retirees who registered under the CPS as foreign nationals and returned to their countries of origin.

Figures obtained from PenCom showed that as of the end of third quarter of 2019, 109,284 retirees with low balances withdrew N27.09bn.

By the end of 2019, March 2020 and June 2020, about 2,241, 2,227 and 1,085 had withdrawn N569.27m, N531.95m and N274.09m respectively.

This brought the total from inception to N28.46bn.

According to regulation of the CPS, retirees with less that N550,000 should be given all the monies they contributed as such was deemed to be too small to be managed by the Pension Fund Administrators and life insurers, either as programmed withdrawal or as life annuity.

PenCom stated in its Q2 report on en-bloc payments that, “The commission granted approval for the payment of the entire RSA balances of the categories 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 life span.

“Approval was also granted for payment of RSA balances to foreign nationals who decided to return to their home countries after making contributions under the CPS.

“Accordingly, the sum of N274.78m was paid to 1,085 retirees, which comprised 140 from the public sector retirees (FGN and state) and 1,085 from the private sector retirees during the second quarter.”

PenCom said it appointed recovery agents as part of efforts to clamp down on activities of employers who deducted the monthly emolument of their workers but did not remit to the respective PFAs.

The RAs were mandated to recover the outstanding liabilities with penalties from defaulting employers.

This was to further reduce the occurrence of many workers retiring and meeting nothing or ridiculously low amounts in their RSAs, which made them to be un-pensionable.

From inception till June, PenCom said its RAs recovered N17.52bn from employers who deducted monthly pensions from their workers’ monthly salaries but refused to remit to their workers’ RSAs with their PFAs.

The amount consisted of principal contribution of N8.89bn and penalty of N8.63bn.

Part of the report read, “Following the issuance of demand notices to some defaulting employers whose outstanding pension contribution liabilities had been established by the recovery agents, 16 of the affected employers remitted the sum of N261.33m representing principal contribution (N152.79m) and penalty (N108.54m) during the quarter.

“This brought the total recoveries made from inception to 30 June 2020 to N17.52bn comprising principal contribution of N8.89bn and penalty of N8.63bn.”

PenCom said it had continued to issue pension clearance certificates to employers who were compliant with pension and insurance provisions for their workers, which cleared them to do government business.

During the second quarter, it said, 5,100 private sector organisations applied for issuance of pension clearance certificate out of which 4,937 were processed and issued the certificates.

It said 163 applications were turned down due to non-remittance of pension contributions for the appropriate period and/or non-provision of group life insurance


The 4,937 organisations that were issued certificates, remitted N19.390,36bn into the RSAs of 67,692 employees, it said.

Director, Center for Pension Rights Advocay, Ivor Takor, said, the CPS unlike the old Define Benefit Scheme it replaced, had inbuilt safeguards meant to protect the fund from mismanagement and fraudulent practices.

The scheme was fully funded through monthly contributions, which were put into RSAs owned by employees and employers could not access the funds, he said.

He said the funds were warehoused by Pension Fund Custodians and managed by PFAs.

Takor explained that the law established PenCom among other objectives, to regulate, supervise and ensure the effective administration of pension matters and retirement benefits in Nigeria.

He however observed that many state governments were not showing commitment in funding the RSAs of their workers.

The adage that ‘rest is sweet after labour’ may after all not hold for employees, both in the public and private sectors, who retired without provision for pensions, he said.

“The adage holds sway only for employees who have got their rest planned for them by their employers during the period of their labour,” he said.

He emphasised the need for workers to plan for their financial future through pension plans.

Related posts

Ex-BBNaija housematesTeddy A, BamBam engaged


Reps summon NNPC GMD over sack of casual workers

Our Reporter

Tackling endemicity of open defecation in Nigerian communities,

Our Reporter

Dana Air concludes NCAA recertification exercise, promises better service delivery


Oronsaye report: Massive job loss looms across MDAs

Our Reporter

Aviation union threatens to sue Bi-Courtney over 20 sacked workers

Social Media Auto Publish Powered By : XYZScripts.com