Nearly 10,000 Nigerians draw pension savings for survival in Q3

Pension savings, a once-distant safety net has become an immediate lifeline for Nigerians who lost their jobs. Just as unemployment and economic hardship worsens, more and more of these Nigerian’s have resorted to drawing from their pension savings to meet day-to-day expenses.

This development saw 9,494 Retirement Savings Account (RSA) holders, neatly 10,000 falling back on their pensions as lifeline in the third quarter of 2024 after loss jobs.

Data released by the National Pension Commission at the end of third quarter shows that a total of 9,512 RSA holders requested to access 25 percent of their RSA balances due to temporary loss of employment.

Out of that, 9,494 RSA holders’ requests were approved, while 18 were rejected because their ages were above 50 years.

“Out of the 9,494 applicants whose benefits were approved, 9,074 were from the private sector, while the remaining 420 were from the public sector.”

The sum of N9, 952.06 million was approved for the approved RSA holders under the age of 50 years.

The Pension Reform Act 2014 states that: ‘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 further states that, 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 retirement savings account only at the time of retirement.

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

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He said the Nigeria CPS introduced by the Pension Reform Act 2004 and revised in 2014 recognises the importance of the contributor, his contribution, and what happens to him 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 wish are supported as far as is within the provisions of the law.

Julius Obah, who worked in an advertising firm, lost his job in December 2020 when many companies were retrenching workers following the impact of the COVID-19 and increasing uncertainties in the economy.

Having approached his PFA four months after he stayed without a job to access part of his pension savings, he was asked to complete the request form and after a month, he was paid.

Obah commenting on the development said, “I would have liked to take more but my PFA insisted I cannot take more than 25 percent since I was not yet retired, but for me it was a good relieve,” he said.

According to Obah, the advantage he had was that his employer had been regular in remitting his pensions. So, it was easy for my PFA to work out my 25 percent because it was meant to be both my accrued rights and what had been remitted to date, he said.

Euphemia Ameh, who recently turned 50 years and has begun the process of accessing the balance in her RSA said she collected 25 percent of the balance of the money when she lost her job four year ago.

“The money was quite helpful for me then because I used it to start a petty trade, which I am still managing till today”

According to her, she could not secure another job since that time and she is looking forward to collecting her final balance have turned 50 years last January, and because it was not enough to procure any of the retirement benefit options she would go ahead to collect the final balance.

The objective of the CPS is to ensure that every person who worked in either the Public or Private Sectors in Nigeria including the self-employed persons receives his/her retirement benefits as and when due.