In the second quarter of 2024, 483,464 Nigerians withdrew a total of N247.47 billion from their Retirement Savings Accounts (RSAs) due to job losses, as reported by the National Pension Commission (PenCom). This withdrawal represents 25% of their pension savings and underscores the economic challenges, including rising business costs and increasing unemployment in Nigeria.
This amount significantly surpasses the N182.2 billion withdrawn by 443,720 RSA holders in the third quarter of 2022, highlighting deteriorating economic conditions attributed to ineffective government policies, according to critics.
The information was shared by Ogwuche Aguda, CEO of the Pension Funds Operators Association of Nigeria (PenOp), during the 2024 annual conference of the Pension Correspondents Association of Nigeria (PenCAN) in Abuja. Aguda noted that contributions to the contributory pension scheme reached N5.72 trillion in Q2 2024, with total pension assets amounting to N20.87 trillion.
As of July 2024, N169.67 billion (0.81% of total assets) was invested in infrastructure. Furthermore, N2.16 trillion (10.35% of total assets) was allocated to the equity market, while N2.25 trillion was directed toward corporate debt in the same quarter.
Aguda praised the Contributory Pension Scheme (CPS) for transforming pension management in Nigeria, shifting it from a flawed system to a more transparent and reliable one.
However, the National Union of Pensioners criticized the 2004 Pension Reform Act for not adequately addressing issues such as the periodic adjustment of pensions for retirees. The union contends that this has led the Nigeria Police Force to consider exiting the CPS. Bunmi Olukolade, the union’s publicity secretary, stated, “The new scheme could be improved by addressing its challenges. There has been no increment for years, which has prompted agencies like the Police to seek alternatives.” He added that inadequate post-retirement support has driven many pensioners to engage in corrupt practices for financial stability.
In response, PenCom assured the public that the federal government will soon address outstanding pension liabilities under the CPS. Director-General Mrs. Omolola Bridget Oloworaran, represented by Corporate Communications head Ibrahim Buwai, confirmed that the backlog of pension liabilities has been calculated and efforts are being made to resolve it swiftly. “This matter will soon be behind us,” Buwai stated, reaffirming the government’s commitment to clearing the outstanding arrears.
Additionally, RSA holders can now use part of their pension savings for equity contributions toward residential mortgages, with over 5,000 workers having benefited from this initiative, amounting to N47.13 billion disbursed to mortgage lenders.
