N27.09 billion withdrawn, as 109,284 retirees quit the Contributory Pension Scheme

The National Pension Commission (PenCom) in a report, disclosed that a total 109,284 retired workers had quit the Contributory Pension Scheme, with N27.09 billion withdrawn as of June 2019 due to low monthly pension payout.

According to Punch, PenCom stated that a huge chunk of the affected retired workers did not have up to N550, 000 in their RSAs as at the time of retirement, while others claimed the monthly payment offered by the Pension Fund Administrator (PFA) was ridiculously low and opted out of the scheme. The Pension Reform Act 2014 stipulates any worker with less than N550, 000 to be given the total balance in their RSA and allowed to leave the pension scheme.

The commission granted approval for the payment of the entire RSA balances of the categories of retirees whose RSA balances were N550,000 or below and considered insufficient to procure a programmed withdrawal or annuity of a reasonable amount over an expected lifespan.

“Consequently, 109,284 retirees received en-bloc payments totalling N27.09 billion from inception to the end of the second quarter of 2019, ” PenCom said.

N27.09 billion withdrawn, as 109,284 retirees quit the Contributory Pension Scheme 

Meanwhile, Mary Moneme, a retiree with less than N1.6 million in her RSA, said, “My PFA said if I collected 50% lump sum, it would be paying me about N6,000 per month if I took the programmed withdrawal. The insurance company said it would be paying me about N7,000  with the annuity. The PFA said if I took 25 per cent lump sum, it would be paying me about N9, 000 while the insurance company said it would pay about N10, 000.”

“What will I be using that kind of monthly stipend to do? I have left my PFA and have not returned there because that monthly stipend is not a living wage.”

Reasons for low RSA balance: Several reasons have been attributed to the issue of low funds in RSAs, according to industry stakeholders.

  • Irregular payment of salaries by employers at the state and private sectors made the workers have no pension savings since the savings could only be deducted from a paid salary.
  • Poor or zero monthly remittance by some employers who had continued to deduct their workers’ monthly salaries but refused to remit into the RSAs.
  • Withdrawals made before leaving by foreign nationals returning to their countries. PenCom reportedly granted approval for payment of the RSA balances to foreign nationals who decided to return to their home countries after making contributions under the Contributory Pension Scheme.

According to the President, United Labour Congress, Joseph Ajaero, other reasons include that a lot of companies were taking casual workers without giving them any pension savings. He stated that contract, casual appointment and outsourcing are precarious jobs that shouldn’t exist under normal employment schedule.

 Mr Ajaero noted that those jobs did not have any form of protection and it was more prevalent in sectors without strong unions that would challenge the system. He stated that many casual workers had no retirement package as their employers did not key them into the Contributory Pension Scheme.

However, according to the acting Director-General, PenCom, Aisha Dahir-Umar, in efforts to combat poor or zero remittance by employers, the commission was pushing for the implementation of a minimum monthly payment of N14,000 to retirees with low RSA balances. Also, PenCom maintained the services of recovery agents for the retrieval of outstanding pension contributions and merited penalties to defaulting employers.

Share this...
Share:

Author: see naija

Leave a Reply

Your email address will not be published. Required fields are marked *