A total of 483,464 Nigerians withdrew N247.47 billion from their Retirement Savings Accounts (RSAs) in the second quarter of 2024 due to job losses, according to data from the National Pension Commission (PenCom). This withdrawal represents 25% of their pension savings and highlights the impact of the rising cost of doing business in Nigeria, which has led to widespread unemployment.
The withdrawal amount in Q2 2024 significantly exceeds the N182.2 billion withdrawn by 443,720 RSA holders in Q3 2022, reflecting the deteriorating economic conditions, attributed by critics to faulty policies implemented by the current administration.
The disclosure was made by the CEO of the Pension Funds Operators Association of Nigeria (PenOp), Ogwuche Aguda, during the 2024 annual conference of the Pension Correspondents Association of Nigeria (PenCAN) held in Abuja. Aguda also provided an update on the contributory pension scheme, noting that contributions from both the public and private sectors rose to N5.72 trillion in Q2 2024, while total pension assets reached N20.87 trillion as of the same period.
Aguda further revealed that N169.67 billion, representing 0.81 per cent of total assets, was invested in infrastructure as of July 2024. Additionally, N2.16 trillion, or 10.35% of total assets, was invested in the equity market, while N2.25 trillion was channelled into corporate debt in the second quarter of 2024.
Aguda praised the Contributory Pension Scheme (CPS) for its transformative impact on pension management in Nigeria, describing it as a shift from a broken system to one that is transparent and reliable.
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However, the National Union of Pensioners criticised the 2004 Pension Reform Act for failing to address key issues, including the periodic adjustment of pensions for retirees. The union claims this shortcoming has driven the Nigeria Police Force to seek an exit from the CPS.
"The new scheme can be better if we address its challenges. There has been no increment for years, which is why the Police and other stakeholders want to leave the scheme," said Bunmi Olukolade, the union's publicity secretary, during the event. He added that the lack of adequate post-retirement support has led many to engage in corrupt practices to secure financial stability in old age. "If pensioners are well cared for after service, agencies like the ICPC and EFCC would have less work to do," he remarked.
Meanwhile, PenCom has reassured Nigerians that the federal government's outstanding pension liabilities under the CPS will soon be cleared. PenCom's Director-General, Mrs. Omolola Bridget Oloworaran, stated that the commission has successfully computed the backlog of pension liabilities. Represented by the head of Corporate Communications, Ibrahim Buwai, Oloworaran emphasised that efforts are underway to resolve the issue swiftly. "This matter will soon be behind us," Buwai assured, reaffirming the government's commitment to addressing the outstanding arrears.
She said RSA holders can now use a portion of their pension savings as equity contributions for residential mortgages. "This initiative has already empowered over 5,000 workers to achieve homeownership, with N47.13 billion disbursed as equity contributions from their RSAs to mortgage lenders."
