28,120 Nigerians withdraw from pension fund amidst job loss in 2016

By ABDUL OLALEKAN

As companies in public and private sectors continue to downsize, with some closing shops due to economic recession in the country, about 28,120 workers, who had lost their jobs, have applied to get 25 per cent of their pension contributions in the current year, Business 247 News Online can reveal.

The Pension Reforms Act 2014, currently in use, makes provision for Retirement Savings Account (RSA) holders under the age of 50 years who were disengaged and were unable to secure another job within four months of their disengagement to access 25 per cent of their pension contributions.

Findings, however, show that from January to September, 2016, 28,120 retrenched workers had applied from the fund, while the volume could rise to 35,000 before the year runs out with more companies sacking workers in a bid to cut down on the cost of operations.

Moreover, while some firms have downsized, some are preparing to lay-off more workers in a bid to cope with the emerging economic realities battling the nation, meaning, more requests are in the offing.

In the first quarter of the year (2016), Business247 News Online learnt that the National Pension Commission (PenCom) granted approval for the payment of N3.32 billion to 10,481 RSA holders under the age of 50 years who were disengaged and were unable to secure another job within four months of disengagement.

It equally granted billions of Naira to 17,639 retrenched workers in the second and third quarters, ending September, 2016.

Investigation shows that most of the beneficiaries are workers in the private sector who were either disengaged by their employers or whose companies have closed down as a result of the economic recession that is affecting virtually every sector of the nation’s economy, although there are few people from federal and state governments who had equally benefited from this window in the current year.

Some of the beneficiaries, insider sources disclosed, are investing this money in their business ideas in a bid to be self employed, while some used it to meet their more immediate financial needs.

Confirming the development at a workshop organised by PenCom for Finance, Insurance & Labour Correspondents and Business Editors in Calabar, Cross Rivers State, yesterday, the Head, Benefits and Insurance Department, PenCom, Mr. Olulana Loyinmi, said the increase in the number of contributors applying for the 25 per cent of their pension contributions was as a result of increase in the number of people that have lost their jobs in the last nine months.

According to him, “On the magnitude of people who have made temporary access to their retirement savings account in the form of withdrawals of 25 per cent, the latest figure  as at September, 2016 is 177,000,which when compared to the number of people who have actually retired and are getting their pension, the figure are almost the same.”

He added that 50 per cent of the documents PenCom processed, since January, on pension matters are actually from those demanding for 25 per cent of their pension contributions.

“That is an indication of how people are losing their jobs or are getting disengaged and having waited for about four months without getting another job; they resort to accessing their retirement account.  If you measure in number, the documents we processed, it is almost about half (50%) of activities of the commission since January,” he stressed.

Earlier at the workshop, the Director General, PenCom, Mrs. Chinelo Anohu-Amazu, had said the enactment of the Pension Reforms Act (PRA) 2014 will allow the commission to expand the coverage of the CPS to the underserved economic sectors through micro pension initiative, noting that the commission seeks to increase registered pension contributors to at least 20 million by the year 2019.

This, she said, would be achieved through the informal sector participation, believing the micro pension plan would provide the impetus.

“The Commission has also enhanced its support to the states in facilitating their adoption and implementation of the CPS by providing a bespoke technical assistance, through our State Operations Department and Zonal Offices in each of the 6 geo-political Zones,” Anohu-Amazu, who was represented by the Commissioner, Inspectorate, PenCom, Professor Mohammed Kaoje, pointed out.