538,237 Sacked Workers Withdraw N294.4bn From Pension Fund Assets

The total withdrawal by disengaged workers who were pension contributions, from about N24trillion pension fund assets, has grown to N294.4 billion as at the end of the first quarter of 2025, LEADERSHIP can now  reveal.

The said amount was withdrawn between 2004, when the Contributory Pension Scheme(CPS) known as the new pension scheme was established, and March 2025.

The Pension Reforms Act(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 Retirement Savings Accounts (RSAs) balance.

The harsh business operating environment coupled with high inflation rate and low purchasing power, low disposable income, among others, have forced companies to reduce staff strength, thereby, throwing more people into the already saturated labour market.

To this end, the disengaged workers have now resorted to their pension contributions by accessing 25 per cent of their pension savings.

Some of the beneficiaries, industry sources disclosed, invested their money in their business ideas in a bid to be self employed, while some used it to meet their more immediate financial needs pending when they get a better job offer.

Speaking at the 2nd Quarter PenCom Press Conference in Ikeja, Lagos at the weekend, the head of Surveillance, PenCom, Abdulrahman Muhammad Saleem, pointed out that, a sum of N294.40 billion were accessed by workers who were under the CPS but lost their jobs, between 2004 and the first quarter of 2025, leveraging on the 25  per cent they were allowed by law to access, to do so.  He stated that, about 538,237 contributors have so far benefitted from this window.

He disclosed that, over time, operators have profitably invested the pension assets such that it is yielding good returns on investment, hence, the impact of the 25 per cent withdrawal will not be felt on the entire assets.

He added that the pension fund assets increased by N820 billion within a quarter as it grew from N22. 51 trillion in December 2024 to N23. 33 trillion at the end of the first quarter of the year, which is, 31st of March, 2025.

Earlier, the director general, National Pension Commission(PenCom), Ms. Omolola Oloworaran has read out riot act to employers who fail to enroll their contract staff into the Contributory Pension Scheme (CPS), threatening to sanctioned defaulters from November 30, 2025.

Saying PenCom is committed to protection of all Nigerian workers, she disclosed that, the regulator has issued a directive to all Licensed Pension Fund Operators (LPFOs), comprising Pension Fund Administrators PFAs) and Pension Fund Custodians (PFCs) to prohibits transacting with service providers and vendors that do not remit pensions for their employees as evidenced by a Pension Clearance Certificate(PCC) issued by PenCom.

Section 2 of the PRA 2014, she said, mandates all employers in the public and private sectors—including Federal, State, and Local Governments—to participate in the CPS and remit pension contributions no later than 7 working days after salary payments.

According to her, despite continuous engagement and enforcement measures, a significant number of employers remain non-compliant with this legal obligation.

The commission, he stressed, intensified regulatory actions by appointing Recovery Agents (RAs) to audit defaulters, recover outstanding contributions, and enforce sanctions.

She said, to further strengthen enforcement, improve compliance, and broaden pension coverage, it has mandated LPFOs to also ensure that, investments are made only with companies and financial institutions that require PCCs from their own vendors and service providers.

“Every Counterparty must execute a Compliance Attestation, confirming that it enforces the PCC requirement across its vendor network. This attestation must be updated annually and included in LPFO investment documentation. Counterparties must also submit valid PCCs from their own vendors/service providers before engaging in any investment transaction with LPFOs, including those involving commercial papers, bond issuances, and bank placements,” she pointed out.

The Parent Companies, Subsidiaries, Holding Companies and Institutional Shareholders of LPFOs, she noted, shall possess valid Pension Clearance Certificate (PCC) and ensure that every vendor and service provider engaged by them complies with the requirement of the PCC as a precondition for entering into any Service Level or Technical Agreement,” she pointed out.