Nigerians have taken out about ₦3 trillion as benefits from inception of the Country’s Contributory Pension Scheme (CPS) up to the end of fourth quarter 2024.
The cumulative amount includes lump sum payments to retirees on programmed withdrawal and life annuities amounting to ₦1.51 trillion and en-block payments amounting to ₦58 billion; Others are loss of job benefits standing around ₦265 billion and death benefits standing at about ₦519 billion.
This was disclosed by the National Pension Commission (PenCom) in its Pension Industry Information Dashboard for the fourth quarter 2024 recently released.
Data from the Commission, according to BusinessDay, show continued growth in Nigeria’s pension sector, with total Assets Under Management (AUM) reaching ₦22.51 trillion as at the end of December 2024. Though the micro pension fund experienced a 16 per cent decline, the Commission said.
According to the PenCom, the retirement payouts are payments made to contributors at retirement through either of the following modes:
Programmed Withdrawal (PW), which is payment, offered by the Pension Fund Administrators (PFAs) that allows a retiree to access his/her retirement benefit on a monthly or quarterly basis; while Retiree Life Annuity (RLA) refers to a series of monthly or quarterly pension payments purchased from an eligible Life Assurance Company.
Whereas En-bloc payment is a lump-sum payment to retirees whose Consolidated RSA Balances are insufficient to secure a monthly or quarterly pension or annuity equivalent to at least one-third of the prevailing minimum wage.
Other means of cashing out as provided in the Pension Reform Act 2004, as amended in 2014 include Loss of Job benefits, Death Benefits and payment as equity contribution for mortgage.
Temporary Access to RSA Due to Loss of Job means that any employee who voluntarily retires, disengages or is disengaged from employment before the age of 50 years and wishes to withdraw an amount not exceeding 25 per cent of his RSA balance shall only do so after four months, if he/she is unable to secure another employment.
Equity contribution for residential mortgage is the portion of funds that an RSA holder can apply from their RSA balance towards the payment required to secure a residential mortgage. RSA holders are permitted to utilise a maximum of 25 per cent of their RSA balance for this purpose.
While death benefit is the available RSA balance due to the legal beneficiary (ies) of a deceased RSA holder.
Meanwhile, from inception of the Contributory Pension scheme in 2004 to December 2024, retirement savings Account (RSA) holders have contributed ₦11.31 trillion, while the figure in the fourth quarter was ₦342.23 billion, a 2.11 per cent increase from the third quarter of 2024.
From the total contribution, the public sector contributed ₦5.89 trillion, equal to 52.1 per cent, while the private sector contributed ₦5.42 trillion, equal to 47.9 per cent.
The RSA registration also showed a similar trend, increasing from 10,340,782 in 2023 to 10,583,853 in 2024, representing a year-on-year growth of 243, 071 or 2.4 per cent.
A five-year growth analysis showed that RSA registration increased from 9.22 million as at 31st December 2020 to 10.58 million as at 31st December 2024, representing a 14.8 per cent growth over the last five years and an average of 273,631 RSA registration per annum.