Pension contributors withdraw N14.79bn as job losses rise

About 26,458 workers who lost their jobs since the COVID-19 pandemic started taking its toll on the economy withdrew N14.79bn from their Retirement Savings Accounts in 10 months, boluwade Moses reports


Records from the National Pension Commission have revealed that more job losers have continued to approach their Pension Funds Administrators to access parts of the funds in their Retirement Savings Accounts.

Many businesses have been challenged and workers lost their jobs due to the hardships caused by the pandemic.

Figures obtained from the quarterly accounts of PenCom showed a growing figure of job losers in the third quarter of 2020.

According to the Pension Reform Act 2014, a worker who loses his job can withdraw 25 per cent of his RSA after waiting for four months and does not get another paid job.

PenCom, in its first quarter report, said, “During the quarter under review, the commission granted approval for the payment of N4.31bn to 8,221 RSA holders who were under the age of 50 years and were disengaged from work but unable to secure another job within four months of disengagement.”

According to the second quarter report, approval was granted for payment of N2.56bn to 4,668 RSA holders who were under the age of 50 years and were disengaged from work but unable to secure another job within four months of disengagement during the second quarter.

The commission stated in its third quarter report that, “During third quarter 2020, the commission granted approval for the payment of N8.1bn to 13,569 RSA holders who were under the age of 50 years and were disengaged from work but unable to secure jobs within four months of disengagement.

The Head, Corporate Communications, PenCom, Mr Peter Aghahowa, said workers who lost their jobs during the coronavirus pandemic would be able to get a quarter of the savings in their Retirement Savings Accounts to cushion their hardship after four months of job loss.

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

According to him, “The contributory pension was designed to allow access to 25 per cent of retirement savings balance in a situation whereby you lose your job.

“So if you lose your job, after four months you can access 25 per cent of your RSA contribution.”

Despite the effect of the COVID-19 pandemic on the economy, the total assets under the Contributory Pension Scheme rose to N11.35tn as of the end of August, the commission revealed.

According to the data from the commission, the funds rose from N11.08tn in June to N11.3tn in July.

The pension commission revealed that N7.51tn or 66.27 per cent of the funds had been invested in Federal Government’s securities.

Other areas where the funds were invested are domestic and foreign ordinary shares, corporate debt securities, local money market securities and mutual funds.

The commission also disclosed in its second-quarter report that following the issuance of demand notices to some defaulting employers whose outstanding pension contribution liabilities had been established by recovery agents, 16 of the affected employers remitted the sum of N261.33m during the period.

It said this represented a principal contribution of N152.79m and penalty of N108.54m during the quarter.

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