Pensions: PenCom Releases New Information That Will Affect Retirees

Pensions: PenCom Releases New Information That Will Affect Retirees

The National Pension Commission (Pencom) has said no fewer than 2,084 retirees cannot be placed on monthly pension payments and have left the Contributory Pension Scheme in the first quarter of 2022.

Pencom disclosed this in its first quarterly report on ‘Enbloc Payment of Retirement Benefits, saying that the affected workers retired with less than N550,000 in their Retirement Savings Accounts with their respective Pension Fund Administrators.

They had, therefore, been refunded all their contributions into the scheme, it added.

PenCom’s report stated that, “During the quarter under review, the commission approved en bloc payment of retirement benefits to 2,084 retirees whose RSA balances were N550,000 or below and considered insufficient to procure programmed withdrawal or retiree life annuity of a reasonable amount for an expected life span.

“In this regard, a total sum of N519.51m was paid to the 2,084 retirees from both the public and private sectors.”

Programmed withdrawal is the monthly pensions paid by the PFAs while annuity is monthly pensions paid by life insurance companies to retirees under the CPS.

According to the Pension Reform Act 2014, any worker with less than N550, 000 is expected to be given the total balance in the RSA by the PFA and subsequently allowed to quit the pension scheme.

PenCom decried the attitude of companies deducting monthly contributions from their workers’ emoluments but failing to remit such to the workers’ RSAs in their respective PFAs.

According to the Pension Fund Operators Association of Nigeria, those that had issues with the lump sum that they collected at the moment were those who had not been able to accumulate enough funds in their RSAs prior to retirement.

PenOp noted that the system was relatively new, and most contributions had only emerged over the last 15 years.

The Chief Executive Officer, PenOp, Oguche Agudah, said, “If the employer and employee have contributed consistently over this period of time, then the funds in that individual’s RSA account would be sufficient to have a decent lump sum with enough funds remaining to earn a decent pension for life.”