Pension Contributors Rise To 8.14m As PenCom Restores 25% Lump Sum Payment To Retirees



The total assets under the Contributory Pension Scheme risen to N8.23 trillion at the end of the second quarter of 2018 just as the number of contributors grew by 312,291 from 7.89 million in December 2017 to 8.14 million as of June 2018.

This is coming as the National Pension Commission has reverted to the old template of 25 per cent lump sum payment to retirees under the Contributory Pension Scheme.

The acting Director-General, PenCom, Mrs. Aisha Dahir-Umar, stated this in Lagos on Thursday at an insurance conference.

The PenCom DG, who was represented at the forum by the Head, Contributions Bond Redemption Department at PenCom, Olulana Loyimi, said the commission decided to suspend the new template because of the criticisms against its introduction.

She said, “As you are aware the commission introduced a new template for Programmed Withdrawal which took effect from 15th May, 2018. There have however been concerns expressed by some stakeholders. The commission in its usual responsive and consultative manner has decided to review the template. Consequently, the commission has directed that Pension Fund Administrators revert to the old template till further notice.”

The net assets value of the pension assets of the contributory pension fund rose to N8.23 trillion as of June, 2018. This represents an increase of N716.94 billion up from the value of N7.52 trillion as of 31st December, 2017. This increase is attributed to new contributions received, interest/coupon from fixed income securities and net realised/unrealised gains on equities and mutual fund investments.”

The commission said the operators had invested a substantial part of the pension funds in the Federal Government’s bonds, treasury bills and state government securities.

The PenCom report stated that some of the money was invested in agency bonds, supra-national bonds, commercial papers, foreign money market securities, and open/close-end funds.

Other investment portfolios where the operators invested the funds are Real Estate Investment Trusts, private equity funds, infrastructure funds, cash and other assets.

PenCom also stated that in order to improve the monthly pension payment to retirees under the CPS, the commission initiated the pension enhancement programme.

The commission said the returns being generated by the PFAs on the balances of the RSAs of majority of retirees could be used to enhance their monthly pensions.

The commission in May released the template to the PFAs for the calculation of retirement benefits to CPS retirees, which led to the reduction in the lump sum being paid out to the retirees to 20 per cent of the balance in their Retirement Savings Accounts and as low as 16 per cent for some pensioners.

The retirees daily expressed their displeasure at their inability to access at least 25 per cent of the balance in their RSAs which the law hitherto allowed.

Part III Section 7(1) A of the 2014 version of the law states. “A holder of a RSA shall upon retirement or attaining the age of 50 years, whichever is later, utilise the amount credited to his RSA for the following benefit: withdrawal of a lump sum from the total amount credited to his RSA provided that the amount left after the lump sum withdrawal or annuity for life in accordance with extant guidelines issue by the commission from time to time.”