Pension retirees numbering 442,000 under the Contributory Pension Scheme (CPS) has taken away as lump sum benefits total of N1.6 trillion in the past 15 years to the period ending second quarter 2023.
This figure represents N964, 239.47 billion paid to 33,201 retirees under programmed withdrawal and N665.13 billion paid to 111, 708 to retirees under life insurance annuity during the same period of 2011- 2023, says the Pension Fund Operators Association of Nigeria (PenOp)
Lump Sum payment is a provision in the Pension Reform Act 2004, as amended in 2014.
“Upon retirement, an employee can draw a lump sum (by whatever name called) from the balance standing to the credit of his/her Retirement Savings Account (RSA) provided the balance after the withdrawal could provide an annuity or fund monthly payments that would not be less than 50 percent of his monthly pay as at the date of his retirement.”
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Oguche Agudah, chief executive officer, of PenOp, while addressing the yearly media parley with insurance journalists disclosed that 442,000 retirees got N1.63trillion as lump sum on annuity and programmed withdrawal in the last 15 years.
Agudah, who spoke on the theme: “At the dawn of 20 years pension reforms, what are the gains?” organised by the Association in Lagos said the Nigeria’s pension industry riding on effective regulatory framework and efficient management system put in place by Pension Fund Operators, has recorded major growth trend to the delight of pensioners and also attracting more enrollees.
According to figures presented by Oguche, the industry since inception paid a total of N665.23 billion to 111.708 applicants as lump sum on life annuity as at second quarter of 2023, while retirees under Programmed Withdrawal, a lump sum paid on programmed withdrawal stood at N964,239.47 billion in Q2, 2023.
On withdrawal of 25 per cent RSA balance on loss of job, the industry paid N208.86 billion to 475,000 Nigerians who lost their jobs from inception of the scheme to Q2 2023, while approval of death benefits payment rose to N356.32 billion paid to 91,214 beneficiaries of deceased employees since inception of the scheme.
Agudah, said the industry was highly regulated and protected, leading to transparency in the scheme, adding that the scheme has 19 PFA’s, 6 closed PFA’s and 3 Custodians.
Lanre Idris, in his presentation said the industry has made significant progress, stating that gone were the days when pensions were only being enjoyed by only the civil servants saying pension is for all Nigerian workers now.
He said that the collective efforts of the stakeholders had changed the face of the pension industry through reforms and evolution of ideas.
Idris noted that gone were the days when pensions were only being enjoyed by civil servants, stating that today, pension is for all Nigerian workers.
He said that the collective efforts of the stakeholders had changed the face of the pension industry through reforms and the evolution of ideas.
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Lanre Idris also said before the promulgation of the 2004 Pension Act, there was no confidence in Pension because retirees were dying in Abuja while waiting to get their pensions.
“Then pension was laughable but today, we are proud on the performance of the pension sector. Today over 10 million subscribers to the Contributory Pension Scheme (CPS) are guaranteed of their pension at retirement. The Pension Ecosystem is working.
Idris said the introduction of CPS has brought inherent transparency to the nation’s pension sector, adding that the N17.65 trillion Pension Assets Under Management, which belongs to the over 10 million subscribers is already invested.
