In a significant development, 8,651 holders of Retirement Savings Accounts (RSA) have withdrawn a substantial sum of N14.20 billion in the first quarter of 2024 due to temporary job loss.
This information was disclosed in the latest report published by the National Pension Commission (PenCom).
PLATFORM TIMES reports that the report indicated that PenCom received a total of 8,702 requests from RSA holders seeking to access 25 percent of their pension savings as a result of temporary unemployment.
It was also gathered that out of these, 8,651 requests were approved, while 51 were rejected because the applicants were above 50 years old.
A detailed analysis of the requests showed a dominant representation from the private sector, accounting for 8,167 requests, with the remaining 484 requests coming from the public sector.
…Economic Context and Implications
PLATFORM TIMES further reports that the backdrop to these withdrawals is the challenging economic environment, exacerbated by the Central Bank of Nigeria’s (CBN) decision to hike the Monetary Policy Rate (MPR).
It was also gathered that the increased MPR, intended to combat persistent inflation, has sparked concerns among private sector players and economists about potential job losses and a looming recession.
This economic strain has evidently contributed to the rise in temporary job losses, prompting more individuals to tap into their RSA balances.
PenCom’s report also highlighted broader trends in pension withdrawals.
As of the end of 2023, the commission had received 510,148 requests for withdrawal of 25 percent of RSA balances, approving 493,156 of these and rejecting 16,992.
The approved withdrawals amounted to N223.99 billion, with the majority again coming from the private sector.
… Retirement Benefit Payments
The report also provided insights into En Bloc payments of retirement benefits within the same quarter.
PLATFORM TIMES observed that PenCom processed 4,042 requests for En Bloc payments, approving 3,936 of these.
PenCom disclosed that the approvals were given to retirees whose RSA balances were insufficient to provide a monthly pension of at least one-third of the prevailing minimum wage, which is N30,000.
The total amount approved for these retirees was N2.56 billion.
The private sector accounted for 3,691 of the approved requests, while 245 came from the public sector.
… Compliance, Recovery Efforts
During the quarter, PenCom also processed and issued 17,317 Pension Clearance Certificates (PCCs) to organizations that met the necessary requirements.
These organizations collectively remitted N69.82 billion into the RSAs of 197,040 employees.
In a related development, the commission reported the recovery of N2.194 billion from 31 defaulting employers.
This amount comprised principal contributions of N751.51 million and penalties totaling N1.443 billion. Additionally, PenCom’s Secretariat/Legal Advisory Services Department has been tasked with initiating legal action against three non-compliant employers.
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