Pension savings withdrawals increase for the first time in five years

...indicating worsening job losses and unemployment across the country...

Unemployment

Withdrawals from pension savings by disengaged workers rose for the first time in five years, by 24 percent to ₦21.52 billion at the end of 2021, indicating worsening job losses and unemployment across the country.

In 2020, the total withdrawals stood at ₦17.39 billion. The number of laid-off workers that approached their pension managers for withdrawals rose by 22.5 percent to 38,846 in 2021 from 31,716 in 2020, indicating that 7,130 pension contributors lost their jobs during this period.

Quoting PenCom data, the Vanguard reported that the withdrawals are in sharp contrast to the 45 percent and 16 percent decline in the number of contributors that lost their jobs and withdrawals from their pension savings between 2017 and 2020.

The Nigeria Employers’ Consultative Association, NECA, and the Trade Union Congress of Nigeria, TUC, told the newspaper that the development portends grave implications for the country’s socio-economic environment while appealing for urgent government intervention to address the difficulties.

The number of contributors that lost their jobs had declined steadily to 31,716 in 2020 from 52,416 in 2017 before the reversal in 2021. Similarly, the value of funds withdrawn from the pension savings fell steadily during the four years to ₦17.39 billion in 2020 from ₦20.68 billion in 2017 before the spike in 2021.

Meanwhile, The National Pension Commission (PenCom) has commenced the recapturing of retirement savings account holders’ data exercise by Pension Fund Administrators.

The commission in a statement Thursday, May 12, 2022, said the exercise is for both active contributors and retirees whose data have not been recaptured.

The commision had introduced the Data Recapture Exercise (DRE) in August 2019 to facilitate complete, accurate and current data collection of all RSA holders, both active and retired.

The DRE is majorly for contributors that registered before July 2019. This implies that retirement savings contributions that were registered before July 2019 do not have sufficient information.

It said the DRE is in compliance with the directive of the Federal Government that all data generating organizations should harmonise their databases with the National Identity Management Commission (NIMC).

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