Pension Contributions Used As Lifeline Amid Economic Hardship

Pension Contributions Used As Lifeline Amid Economic Hardship

In response to the challenging economic conditions, there was a significant surge in workers making withdrawals from their voluntary pension contributions in the first quarter of 2024. According to the National Pension Commission (PenCom), withdrawals increased by 87.6%, with 1,302 workers accessing their voluntary savings, compared to 694 in the previous quarter. The total value withdrawn also rose sharply by 160%, reaching N3.9 billion, up from N1.5 billion.

The breakdown revealed that the majority of withdrawals, 1,259, came from the private sector, while 43 were from the public sector. Voluntary contributions allow employees to augment their mandatory pension savings, enhancing their retirement benefits under the Pension Reform Act (PRA) 2014.

Additionally, the report highlighted that 1,390 RSA holders sought to access up to 25% of their balances for mortgage payments. Of these requests, 1,234 were approved amounting to N10.5 billion, while 156 were rejected due to documentation errors. The private sector accounted for 379 approved requests, with the public sector making up the remainder.

In terms of RSA registrations, the report indicated 89,061 new accounts were registered in Q1’24. Stanbic IBTC Pension Managers led with a market share of 23.9%, followed closely by Access Pensions Limited at 22.5%. ARM Pension Managers Ltd, Leadway Pensure PFA, and Premium Pension rounded out the top five with 8.4%, 7.1%, and 7.0% respectively.