The Pension Fund Administrators have recorded N7.98tn profit from investing contributions made by workers into their Retirement Savings Accounts under the Contributory Pension Scheme, according to a new report.
The report, obtained by newsmen from the Pension Fund Operators Association of Nigeria, revealed that the total funds under the CPS stood at 17.37tn as of the end of second quarter of 2023.
Contributions made by the workers from both private and public sectors stood at N9.37tn in the period under review.
The report titled, ‘At the dawn of 20 years of pension reform, what are the gains?’ and released by the Chief Executive Officer, PenOp, Mr Oguche Agudah, showed that workers’ contributions accounted for 54 percent, while the return on investment accounted for 46 percent of the entire pension funds as of the end of June 2023 from the beginning of the CPS in 2004.
The pension operators disclosed that workers’ contributions were judiciously invested, and the returns were added to the workers’ pension savings, to reduce the effect of inflation on the funds.
Further figures showed that as of the end of the third quarter of 2023, the PFAs had recovered N24.8bn from defaulting employers,
PenOp revealed in the report that in Q2, 2023, N665.13bn had been paid as a lump sum to annuity retirees; and N964.24bn to programmed withdrawal retirees, making a total of N1.64tn to 442,000 retirees.
Micro pension hits N435m as contributors rise to 97,000
It added that N208.86bn was paid to 475,235 workers who lost their jobs before getting to the official retirement age and were unable to get another job after four months.
Total death benefits paid to 91,214 beneficiaries amounted to N356.32bn in the second quarter of 2023.
The report showed that 649 contributors got approval to access N7.89bn from their RSAs for residential mortgages.
While highlighting the expectations of the operators in 2024 and beyond, Agudah said, it was expecting to celebrate 20 years of the Pension Reform Act, show greater focus on micro pensions, and also look into the revision of investment guidelines.
He added that the operators looked forward to more applicants and approvals for RSA mortgage, possible kick-off of offshore investment, and infrastructure consortium.
The report stated that the PRA was established as an Act to establish CPS for employers in the public, Federal Capital Territory, and private sectors in the country.
Between 2007 and July 2023, it added, the contributors under the CPS rose from 2,543,178 to 10,023,314.