As part of its obligations to contributors, the National Pension Commission (PenCom) has approved a total of N531.88bn billion lump sum for retirees in the last 11 years since the Contributory Pension Scheme (CPS) became effective. According to the commission, the amount consists of N467.97 billion under Programme Withdrawal as well as N63.90 billion under Annuity.
While the figure under Programme Withdrawal covered between December 2007 and March 31, 2018, that of Annuity covered between January 2010 and March 31, 2018. Lump sum is the bulk amount paid to the retiree at retirement after determining the monthly pension from the RSA balance.
It is not automatic but subject to variables such as Retirement Savings Account (RSA) balance, gender, last salary, age at retirement using Programmed Withdrawal template.
The approval is coming just as the total pension assets has increased from N7.52 trillion as at December 2017 to N7.779 trillion as at February 2018. Acting Director- General of PenCom, Mrs. Aisha Dahir- Umar, confirmed the figures and new updates in CPS yesterday in Uyo, Akwa- Ibom state at a workshop with the theme: “Contributory Pension Scheme: Achievements and Challenges.”
Represented by PenCom Legal Adviser, Mr. Mohammed Sani , PenCom DG also confirmed that the number of contributors of the scheme had grown steadily by over 390,000. She said the contributors increased from 7.50 million as at March 31, 2017 to 7.89 million as at December 31, 2017, and then to 7.90 million as at February 28, 2018.
On the launch of micro pension scheme, she said, “the commission is intensifying efforts at ensuring the provision of necessary infrastructure for the launching of the micro pension scheme in line with commission’s strategic objective of expanding coverage of the CPS to the under- served sectors.
This is a major kernel of the strategy for expanding coverage of the Contributory Pension Scheme. She added that the guidelines for micro pension scheme were being finalised preparatory for the commencement of the scheme. PenCom. she also said, had put measures in place to enhance pension of retirees under programme withdrawal.
“In order to enhance the monthly pension of retirees in the CPS, the commission initiated the pension enhancement programme. It was discovered that the returns being generated by the Pension Funds Administrators (PFAs) on the balances of the RSAs of majority of retirees could be used to enhance their monthly pension.
“Consequently, the commission sought for and obtained the approval of the Secretary to the Government of the Federation to implement the pension enhancement, which resulted in increased monthly pensions for most retirees receiving pension under program withdrawal arrangement,” she said. Aisha confirmed that all PFAs had commenced the enhancement of pension of all retirees under program.e wthdrawal with effect from December 2017.
She said the commission, on observing the high rate of withdrawal from voluntary contributions, raised a circular to arrest the trend. “The Commission issued a circular on withdrawal from voluntary contributions ( VC) in November, 2017.
The circular was necessitated by the observed incidences of high rates of withdrawal from VCs by contributors, which appeared to negate the main purpose of using such contributions to augment pensions at retirement,” she added.