The total withdrawals by disengaged workers who were formerly pension contributors, from the N12.4 trillion pension asset have now grown to N147 billion as at the end of the first quarter of 2021, LEADERSHIP can exclusively reveal.
This brings the total money withdrawn from the pension fund as a result of job losses to N147 billion.
In the first quarter of the current year alone, a total of 10,619 disengaged workers withdrew N5 billion from pension fund assets.
A document released and sourced from the National Pension Commission (PenCom) yesterday, said: “The commission granted approval for the payment of N5,021,361,563.85 to 10,619 RSA holders under the age of 50 years, who were disengaged from work and unable to secure jobs within four months.”
The negative effect of the coronavirus pandemic on the nation’s economy, coupled with high inflation and low purchasing power, 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.
The Pension Reforms Act (PRA) 2014 allows contributors, under the age of 50, who were disengaged from work and are unable to secure another job within four months of disengagement, to access 25 per cent of their respective savings in their Retirement Savings Accounts (RSAs).
The N147 billion withdrawn so far is the total amount granted by the pension industry to 380,682 disengaged workers from the inception of the new pension scheme in 2004 till the end of March, 2021.
Further checks by LEADERSHIP FRIDAY showed that the pension industry actually granted N19.3 billion to 38,254 disengaged workers in 2020 alone, an amount that translates to 25 per cent of their pension savings.
Documents of the National Pension Commission (PenCom) sourced by LEADERSHIP FRIDAY revealed that during the first quarter of 2020, PenCom granted approval for the payment of N4.31 billion to 8,221 RSA holders who were under the age of 50 and were disengaged from work but unable to secure another job within four months of disengagement.
Similarly, in the second quarter of last year, approval was granted for payment of N2.56 billion to 4,668 RSA holders under this category, while during the third quarter 2020, PenCom granted approval for the payment of N8.10 billion to 13,569 RSA holders, even as there was payment of N5.3 billion to 11,796 RSA holders under the age of 50 years, who were disengaged from work and unable to secure jobs within four months, in the last quarter of last 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 immediate financial needs.
While pension fund operators have promised that there will be no depletion of the pension fund assets despite the withdrawals, they maintained that the safety of the over N12 trillion pension asset is germane to operators, even as they said the 25 per cent acceptable withdrawal is one of the advantages of the Contributory Pension Scheme (CPS).
Speaking on behalf of pension fund operators, the chief executive officer (CEO) of PenOp, Oguche Agudah, disclosed that pension operators work assiduously to grow the pension fund assets contributed by RSA holders, while trying to strike a balance between safety and returns on investments.
He maintained that as part of efforts to grow the pension fund assets, operators are eyeing other alternative investment options aside from the government bonds and treasury bills.
The director general, PenCom, Mrs. Aisha Dahir-Umar, has assured that the commission will not relent in its efforts to deepen pension coverage in the country, thereby, mobilising enough savings that could be effectively deployed for economic growth and development.