Retirees, workers access N165bn benefits in Q2

Retirees and workers accessed N165 billion pension benefits payout in the second quarter (Q2) of 2024, according to the National Pension Commission (PenCom).

This payout highlights the importance of pension scheme in providing financial security for participants and contributing to the overall economy, analysts said.

“These payments demonstrate the broad benefits of the pension system, offering financial security to retirees and their families, as well as supporting contributors with home ownership and voluntary savings,” analysts at Pension Fund Operators Association of Nigeria (PenOp) said.

Oguche Agudah, chief executive officer, PenOp, said significant disbursements were made to retirees and beneficiaries across various categories in the latest pension fund payout report.

According to him, a total of N39.05 billion was paid to 7,473 retirees through the programmed withdrawal option, while N58.63 billion was disbursed to 5,304 retirees under life annuities, ensuring a sustained income for life.

“Additionally, N34.97 billion was approved for 3,437 beneficiaries as death benefits, providing financial support to the families of deceased contributors,” Agudah said.

Analysis of the data further shows that N2, 286.36 million was paid out to 3,231 retirees as en bloc payments, which are lump sums given to those whose pension balance fell below the threshold required for programmed withdrawal or life annuity.

Agudah also said that N9, 273.48 billion was approved for 5,528 Retirement Savings Account (RSA) holders under the age of 50, allowing them to access up to 25 percent of their RSA balance.

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“N142.56 million was also approved for 60 retirees for pre-Act contributions, addressing entitlements before the Contributory Pension Scheme (CPS) came into effect.”

According to him, approvals were granted for 2,305 requests, totalling N18. 003.65 billion, to be used as equity contributions for residential mortgages, aiding contributors in securing home ownership.

Additionally, 797 contributors withdrew N3.46 billion from their voluntary contributions, allowing them to access funds saved voluntarily alongside their mandatory pension contributions.

Joseph Ogu, a retiree on life annuity with one of the insurance companies, said with the cost of living going up without abating, many retirees have found themselves relying solely on their pensions to meet basic needs.

“This has become a lifeline for many of us, especially in urban areas where expenses have been so high with current high cost of fuel, gas, transportation, feeding,” he said.

Ogu noted that the worrying situation is that many retirees like him would use their small earnings to feed and take care of their families, including the graduate children who have left schools without any employment for them.

“There are wider implications for families and social support structures, as many retirees find themselves financially supporting not just themselves but also their families.”

An official in PenCom, who preferred his name not mentioned, said this kind of benefit underscores the urgent need for a more robust and inclusive pension system in Nigeria.

“This is why we are doing everything possible to ensure that more people, particularly in the informal sector, benefit from the scheme through the Micro Pension Plan (MPP),” the official said.

Data from the industry regulator, PenCom, shows that micro pension plan, which targets to bring into the pension net the informal sector workers, have captured just 143,565 participants with N867.37 million so far paid to the Pension Fund Administrators (PFAs).

In the second quarter, 16,624 micro pension contributors (MPC) were registered by 15 PFAs, raising the number to 143,565 since of the MPP.

The key objectives of the Pension Reform 2004, as amended in 2014, are to ensure that contributors receive their benefits as and when due and to assist improvident individuals to save in order to cater for their livelihood during old age.