The National Pension Commission (PenCom) has said that out of a total of 8,702 Retirement Savings Account (RSA) holders requested to access 25 per cent of their RSA balances, only 8,651 applicants granted, leaving fifty-one 51 rejected as their age above 50 years in the first quarter of 2024.
According to the commission, the contributors requested as a result of temporary loss of employment.
This was revealed in the First-Quarter 2024 Report of the commission, posted on its website, saying that the approved applicants comprised 8,167 individuals from the private sector and 484 from the public sector of the economy.
The report also explained that a sum of N14.2 billion was payout to 8,651 pension contributors who experienced temporary job loss while the total sum disbursed reflects the considerable financial support provided to these individuals under the age of 50 years, averaging around N1.64 million per person in the period.
The report said the shift is part of the measures to ease the financial challenges faced by individuals due to the lingering unemployment crises in the country, providing much-needed respite amid a bad economic situation.
The commission in the report said that from the inception of the contribution to March 2024, a total of N238.19 billion has been approved for 501,807 requests in the country.
The total amount is an increase of 6.34 per cent from N223.99 billion recorded in December 2023, indicating a growing reliance on pension funds as a financial safety net.
The total number of requests submitted since inception was 518,850, with 501,807 approved and 17,043 rejected.
This approval rate of approximately 97 per cent shows PenCom’s role in providing critical financial assistance to a vast number of Nigerians during periods of unemployment.
The cumulative amount transferred illustrates the significant financial burden borne by the pension fund system and highlights the increasing economic pressures faced by individuals in the country.
In Q1, the private sector remained predominant with 8,167 approvals, which is 94.4 per cent of the total requests made in that period.
This trend affirms the higher prevalence of job loss in the private sector. Since the inception of the pension scheme, the private sector has accounted for a total of 478,241 approvals, reflecting the sector’s vulnerability to economic fluctuations.
The public sector, though less affected, still saw nearly 500 individuals seeking financial relief. Specifically, there were 269 requests from federal employees and 215 requests from state government employees in Q1 2024.
Since the scheme began, there have been 14,407 approvals from individuals employed by the federal government, while the state government sector has seen 9,159 approvals.
The data indicates that although job loss affects all sectors, the private sector employees are significantly more impacted.
In total, since inception, there have been 14,407 approvals from individuals employed by the federal government while the state government sector saw 9,159 approvals.
According to Section 7(2) of the Pension Reform Act 2014, “Where an employee voluntarily retires, disengages or is disengaged from employment, as provided for under Section 16(2) and (5) of this Act, the employee may, with the approval of the National Pension Commission, withdraw an amount of money, not exceeding 25% of the total amount credited to his retirement savings account, provided that such withdrawals shall only be made after four months of such retirement or cessation of employment and the employee does not secure another employment.”
Nigeria’s economic landscape is fraught with challenges that are further exacerbated by job loss.
The disbursement of pension funds provides temporary relief, but the underlying issues remain significant.
The country’s high unemployment rate, inflation, and volatile economic conditions contribute to financial instability for many Nigerians.
The private sector, in particular, has been hard-hit by these economic challenges.
