Rise in Job Losses Forced Pension Contributors to Withdraw N14.79bn

The National Pension Commission (PENCOM)

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.

Since COVID-19 pandemic started taking its toll on the economy, many businesses have been challenges and as a result of the hardship caused by the pandemic, they have reduced their staff strength significantly.

According to the Pension Reform Act 2014, a worker who loses his job can withdraw 25 per cent of his Retirement Savings Accounts. Therefore, about 26,458 workers who lost their jobs have so far withdrew N14.79bn from their RSA in 10 months.

In its first quarter report, PenCom 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.”

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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.

The Commission further stated that, “During the thirds quarter 2020, approval was granted 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 it had been observed that there is increase in job loss due to the effect of the coronavirus pandemic. He therefore affirmed that workers who lost their job during the pandemic would be ale to get a quarter of the savings in their RSA to cushion their hardship after four months of job loss.

The commission revealed that 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.

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

The President, Pension Fund Operators Association of Nigeria, Mr. Wale Odutola said pension fund operators had done the necessary requirement by upgrading their IT systems to enhance seamless pension account transfer.

According to him, this would change service delivery in the entire pension industry, and benefit the contributors of the scheme. He added that the ultimate aim was to grow the pension industry, make the pension funds have bigger impact on the economy, and give good investment returns to stakeholders.