In one year, 15,634 workers who retired under the Contributory Pension Scheme and could not receive up to N10,000 monthly stipends withdrew N7.79 billion from their respective Pension Fund Administrators’ Retirement Savings Accounts.
According to The Punch, National Pension Commission’s weekly report on en-bloc payments to retirees reveal that these retirees were those who had less than N1.6 million in their RSAs, withdrew the entire amount, and left the CPS between the second quarter of 2022 and the end of the first quarter of 2023.
They joined the 133,738 pensioners who had previously left the CPS because their RSA balance was less than N550,00 at the time of retirement.
Prior to this, PenCom had approved the payment of the whole RSA balances of retirees whose RSA balances were N550,000 or less and deemed insufficient to secure a programmed withdrawal or annuity of a suitable amount throughout an anticipated lifespan.
As a result, 149,372 retirees had left the CPS in total, and N41.3 billion had been paid back to them.
The 149,372 total included 137,585 retirees from the private sector, 4,203 state governments, and 7,584 retirees from the federal government.
In the second quarter of 2022, authorization was given for 3,369 retirees to receive en bloc retirement payments of N1.45 billion, according to PenCom’s records. These seniors’ RSA balances could not provide a monthly pension of at least N30,000, or one-third of the current minimum wage.
“In the third quarter, approval was given for 4,529 pensioners to receive en bloc payments of retirement benefits totaling N2.40 billion. These retirees’ RSA accounts were insufficient to provide them a monthly pension equal to at least one-third of the current minimum salary (N30,000).
“In the fourth quarter, authorization was given for 3,677 pensioners to receive en bloc payments of retirement benefits totaling N1.56 billion. These were retirees whose RSA balances were insufficient to provide a minimum monthly pension of at least one-third of the prevailing minimum wage (N30,000).”
PenCom stated in 2022 that new retirees who were eligible for a pension of less than N10,000 per month at retirement might withdraw the entire amount in their RSAs.
PenCom revised the rules governing enbloc payments to retirees and now permits those who retired with less than N1.6 million to take their whole retirement account amount as opposed to receiving payments on a monthly basis.
It read, “There is a new regulation that says you are allowed to go with the balance in your account if your RSA balance cannot offer one-third of the minimum wage.
“You can take all of your savings if your monthly pension does not equal N10,000, which is one-third of the N30,000 minimum wage.”
PenCom had criticized businesses that had a reputation for taking pension savings out of employees’ monthly stipends but not remitting them into their RSAs.
The situation of workers who had continued to retire with laughably small amounts in their RSAs had gotten worse as a result.
“The commission continued to maintain the services of recovery agents for the recovery of unremitted pension contributions and penalties from defaulting employers,” PenCom added.
