Business

Foreigners, others quit contributory pension, withdraw N24.95bn

Published

7 years ago

February 3, 2019

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Foreign nationals have opted out of the Contributory Pension Scheme and withdrawn all their contributions from their respective Retirement Savings Accounts.

The foreigners decided to return to their countries after working in Nigeria.

Similarly, some retirees under the CPS, who could not be entitled to monthly pensions due to low savings in their RSAs, have also withdrawn their contributions in their RSAs and left the scheme.

Figure obtained from the National Pension Commission on Wednesday revealed that these categories, comprising, of 99,444 contributors had withdrawn a total of N24.95 billion from the beginning of the scheme till the end of September 2018.

90,419 were from the private sector; 2,697 from the state service while 6,328 were former federal workers, the commission revealed.

In a report on en-bloc payments, it stated, “The commission granted approval for the payment of the entire RSA balances of the categories of retirees whose RSA balances were N550,000 or below and considered insufficient to procure a programmed withdrawal or annuity of a reasonable amount over an expected life span.

“Approval was also granted for payment of RSA balances to foreign nationals who decided to return to their home countries after making contributions under the CPS,” the report showed.

PenCom added, “Consequently, 99,444 retirees received en-bloc payments totalling N24.96bn from inception to the end of the third quarter of 2018.”

Most of the retirees with low pensions, it was discovered, were those whose employers (private, state and federal) had been deducting their monthly salaries but not remitting the deducted amount to their Pension Fund Administrators.

The commission revealed that the concerned workers did not have above N550, 000 in their savings as of the time they reached 50 years and met the conditions of retirement under the CPS.

The Pension Reform Act 2014 stated that retirees could only access their monthly pensions either by subscribing to programmed withdrawal administered by the PFAs or annuity sold by the life insurance companies.

To have any of these policies, retirees must have more than N550, 000 in their RSA or the total balance would be returned to them.