50,000 RSA Holders Withdraw N291.7 Billion in Pension Benefits in H1 2024
By Patience Ikpeme
In the first half of 2024, approximately 50,125 Retirement Savings Account (RSA) holders participating in Nigeria’s Contributory Pension Scheme (CPS) withdrew a total of N291.7 billion in pension benefits. This announcement underscores the active engagement and the efficacy of the CPS in providing financial security to retirees.
The CPS, managed through Pension Fund Administrators (PFAs), ensures regular pension payments and a steady income for life via Retirement Life Annuities (RLAs) purchased from Life Insurance Companies. Besides retirement benefits, the CPS offers provisions for Temporary Job Loss, Death benefits, En bloc payments, and Equity Contributions for Residential Mortgages, among other benefits.
The scheme allows contributors to withdraw a lump sum from their balance, provided it is sufficient to secure either a Programmed Withdrawal (PW) or an RLA for pension.
Between January and June 2024, the National Pension Commission (PenCom) disbursed a lump sum of N74.88 billion to 13,581 retirees under the Programmed Withdrawal (PW) option, with monthly pensions totaling N871.02 million. Additionally, N35.21 billion was approved for 9,560 retirees under the Retiree Life Annuity (RLA) scheme, and N52.71 billion was paid to RLA providers to disburse monthly pensions amounting to N885.22 million for the same period.
Section 7(1) of the Pension Reform Act (PRA) 2014 stipulates that RSA holders can access their benefits upon retirement or upon reaching the age of 50. En bloc payments from January to June 2024 totaled N4.85 billion, approved for 7,167 retirees who could not procure a PW or RLA equivalent to one-third of the national minimum wage as stipulated in the Revised Regulation for the Administration of Retirement and Terminal Benefits.
PenCom also approved N23.47 billion for 14,179 RSA holders under 50 years old who were disengaged from employment and unable to secure a job within the stipulated four-month period.
Section 4(3) of the PRA 2014 allows RSA holders to make Voluntary Contributions (VC) in addition to their mandatory contributions to boost their retirement savings. These voluntary contributions can be withdrawn periodically, following specific guidelines. Between January and June 2024, PenCom authorized withdrawals totaling N7.33 billion from voluntary contributions made by 2,099 contributors.
Furthermore, RSA holders can use their RSA balance to pay equity contributions for residential mortgages, as per Section 89(2) of the PRA 2014. PenCom distributed N28.52 billion to 3,539 RSA holders for their equity contributions towards residential mortgages from January to June 2024.
Over the past two decades, PenCom has effectively regulated access to retirement and terminal benefits within the CPS. The Commission has established necessary criteria for RSA holders to receive their benefits promptly, ensuring a smooth process for accessing retirement benefits. PFAs are responsible for guiding RSA holders on the necessary documentation required for each type of benefit payment.
The successful disbursement of N291.7 billion in pension benefits during the first half of 2024 highlights the robustness of the CPS in securing financial stability for retirees.
