The National Pension Commission (Pencom) refunded N848.92m to 3,499 retirees under the Contributory Pension Scheme and allowed them to leave the system due to low balances in their Retirement Savings Accounts in the fourth quarter of 2020.
This was contained in PenCom’s report on ‘Enbloc payment of retirement benefits’ for the fourth quarter. According to the report, the concerned retirees did not have above N550,000 in their RSAs as of the time they retired.
Part of the report read, “During the quarter under review, the commission granted approval for enbloc payment of retirement benefits to 3,499 retirees whose RSA balances were N550,000.00 or below and considered insufficient to procure Programmed Withdrawal or Retiree Life Annuity of a reasonable amount for an expected life span.
“In this regard, a total sum of N848.92m was paid to the 3,499 retirees comprising 200 public (FGN and state) and 3,299 private sector retirees.”
According to the regulation of the CPS, retirees with less that N550,000 should be given all the money they contributed and as such was deemed to be too small to be managed by the Pension Fund Administrators and life insurers, either as programmed withdrawal or as life annuity.
PenCom said it appointed recovery agents as part of efforts to clamp down on activities of employers who deducted the monthly emolument of their workers but did not remit to the respective RSAs with the PFAs.
This was to reduce the number of workers who retired with ridiculously low savings in their pension accounts, it stated.