118,044 retirees withdraw N29.26bn, leave pension scheme

Published January 15, 2021

Nike Popoola
A total of 118, 044 retirees withdrew N 29 . 26 bn from their Retirement Savings Accounts and left the Contributory Pension Scheme because they had low balances in their accounts which could not be utilised as monthly stipends for them .
Many of the affected retirees were those that their employers were deducting their pensions from their monthly emoluments but declined to remit the monies into the RSAs of the employees with their respective PFAs .
They included federal, state and private retirees , according to information obtained from the National Pension Commission .
Some of them were however foreigners who exited the CPS because they returned to their countries .
PenCom stated in its quarterly report , “ The commission granted approval for the payment of the entire RSA balances of the categories of retirees whose RSA balances were N 550 ,000 or below and considered insufficient to procure a programmed withdrawal or annuity of a reasonable amount over an expected lifespan .
“ Approval was also granted for payment of RSA balances to foreign nationals who decided to return to their home countries after making contributions under the CPS. ”
While programmed withdrawal is the monthly stipend paid to the retirees by their PFAs , annuity is paid by life insurance companies to their pensioners.
The Pension Reform Act states that retirees with balances below N 550 ,000 should be given back all their savings at retirement, as such was considered insufficient to procure either programmed withdrawal or annuity.
According to PenCom , 109, 284 retirees withdrew N 27 .09 bn from the scheme from its inception to third quarter of 2019 .
In the fourth quarter of 2019 , 2 ,241 retirees withdrew N 569 .27 m , while 2 ,227 retirees withdrew N 531. 93 m in the first quarter of 2020 .
A total of 1 ,085 retirees withdrew N 274. 78 m in the second quarter of 2020 , while 3 ,207 retirees withdrew N 820. 54 m in the third quarter .
PenCom stated that it had continued to go after employers that were notorious for deducting pension savings from the monthly emoluments of their workers , but refuse to remit such to their RSAs with their respective PFAs .
Following the issuance of demand notices to defaulting employers whose pension liabilities were established by the recovery agents , PenCom said it recovered N 261 . 33 m from 16 employers , representing principal contribution of N 152 . 79 m and penalty of N 108 .54 m in the second quarter of 2020 .
“ This brought the total recoveries made from inception to 30 June 2020 to 17 .52 bn comprising principal contribution of N 8 .89 bn and penalty of N 8. 62 bn .
It also disclosed that it recovered N 213. 07 m representing principal contributions of N 156 .53 m and penalty of N 56 . 53 m from 13 defaulting employers in the third quarter of 2020 .
This brought the total amount recovered from the defaulting employers from inception to the third quarter of 2020 to N 17 .73 bn .