More Nigerians revert to pension savings for survival

Nigerians who lost their jobs have continued to fall back on their pension savings to survive current economic difficulties. Data from the National Pension Commission shows pensions have become an immediate lifeline to help people meet their day-to-day expenses.

This development has seen workers in both the public and private sectors who lost their jobs fall back on pension savings to survive current hard times.

The data for the first quarter 2024 from PenCom shows that a total 8,702 Retirement Savings Account (RSA) holders, otherwise called contributors, requested to access 25 percent of their balances due to temporary loss of employment.

According to the commission, out of this, 8,651 RSA holders’ requests were approved and they took away N14.2 billion.

“Out of the applicants whose benefits were approved 8,167 were from the private sector, while the remaining 484 were from the public sector,” it said.

Data from the National Bureau of Statistics (NBS) shows that Nigeria’s unemployment rate surged to 5.0 percent in the third quarter of 2023 from 4.2 percent in the previous quarter.

According to a new methodology adopted by the NBS, the unemployment rate in Africa’s biggest economy, with more than 200 million people, fell from 5.3 percent in Q4 2022 to 4.1 percent in Q1 2023.

The Pension Reform Act 2014 says: “Where an employee voluntarily retires, disengages or is disengaged from employment as provided for under Section 16 (2) and (5) of this Act, the employee may with approval of the commission withdraw an amount of money not exceeding 25 percent of the total amount credited to his retirement savings account, provided that such withdrawal shall only be made after four months of such retirement or cessation of employment and the employee does not secure another employment.”

It says where an employee has accessed the amount standing in his retirement savings account pursuant to subsection (2) of this section; such employee shall subsequently access the balance in the retirement savings account only at the time of retirement.

Agudah Oguche, chief executive officer of Pension Fund Operators Association, while commenting on the disbursement of death benefits to dependants of bereaved workers over a five-year period, said the Contributory Pension Scheme (CPS) has successfully reflected the commitment of both the increasing number of beneficiaries and providing financial support to those who are entitled to it during critical times.

He said the CPS, introduced by the Pension Reform Act 2004 and revised in 2014, recognises the importance of the contributors, the contributions, and what happens them while in employment.

“This is both when there is life and in death. With this realisation that there is life and there is also death, the operators ensure that people’s wishes are supported as far as is within the provisions of the law.”

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