People who were disengaged from their previous jobs had withdrew N5.4 billion from the nation’s pension assets between October and December, 2018, 13,609, LEADERSHIP learnt.
Findings by LEADERSHIP showed that the continuous disengagement of workers majorly in the private sector has made them to resort to their pension contributions by accessing 25 per cent of their savings.
With the harsh economy robbing off the labour market, findings show that 302,735 ex-workers who were sacked by their respective companies, from the inception of the new pension scheme in 2004 till 2018, were able to withdraw N103.42 billion from their pension contributions.
It was learnt that the disengaged workers made the N103.4 billion withdrawal between 2004, when the Contributory Pension Scheme(CPS) came into effect and December, 2018.
A recent document sourced from the National Pension Commission(PenCom) shows a huge number of 13,176 workers were disengaged in the third quarter of 2018, that is, between July and September 2018, while these disengaged workers withdrew N5.09 billion from the pension assets within this time frame.
According to PenCom, “Approval was granted for payment of N5.14 billion to 13,609 RSA holders who were under the age of 50 years and were disengaged from work and unable to secure another job within 4 months of disengagement.”
It added that the amount paid to the beneficiaries were, 25 percent of the balances of their Retirement Savings Accounts (RSAs) as prescribed by the Pension Reform Act(PRA) 2014. The private sector, it said, accounted for 95.70 per cent of those who benefited from these payments while the public sector accounted for 4.30 per cent.
The PRA 2014 allows contributors, under the age of 50 years, who were disengaged from work and were unable to secure another job within 4 months of disengagement, to access 25 per cent of their respective RSAs.
Moreover, while some firms in both public and private sectors have downsized, some are preparing to lay-off more workers in the current year, in a bid to cut their expenditure, meaning that, more workers are going to be disengaged, hence, more pension contributors will demand for 25 per cent of their RSA balance in the current year.
Some of the beneficiaries, industry sources disclosed, are investing this money in their business ideas in a bid to be self employed, while some used it to meet their more immediate financial needs.
The increase in the number of people accessing their pension account as a result of job loss, according to market observers, was due to the harsh economic scenario in the country, but noted that this intervention further shows the beauty of CPS. Speaking on this development, the managing director, NPF Pensions Limited, Mr. Hamza Sule Wuro Bokki, said the 25 per cent withdrawal does not deplete the Pension assets because of the continuous growth in the fund.
He said, the gesture is a temporary measure given to RSA holders to assist them financially during this trying period, noting that, as soon as they regain a new employment, they continue to remit.
With new contributors joining the new pension scheme on a daily basis as well as the investment income emanating from the investment of pension assets, he stressed, the pension fund is not under any threat, saying, what is being withdrawn is small compared to what is coming into the pension pool.