With the harsh economy taking its toll on the employment market, 275, 172 workers who were sacked by their respective companies have resorted to pension fund for succour, as they were able to withdraw N86.7 billion from their pension contributions, LEADERSHIP can now reveal.
Finding showed that the disengaged workers made the withdrawal between 2004, when the Contributory Pension Scheme (CPS) came into effect and June, 2018. The amount withdrawn, it was learnt, was about one per cent of the N8.2 trillion pension assets.
The incessant loss of jobs by workers in the public and private sectors has been on the rise during and after recession, as companies were trying to cut down their operating expenses.
a result, a document sourced from the National Pension Commission (PenCom) showed a huge number of 12,854 workers were disengaged in the second quarter of the year, that is, between April and June, 2018, while these disengaged workers withdrew N5.6 billion from the pension assets within this timeframe.
Of the entire disengaged workers who accessed their pension contributions, LEADERSHIP learnt that about 93 per cent of them were from the private sector, an indication of lack of job security in the private sector of the nation’s economy. The public sector seems to be better in terms of job security as only about seven per cent of pension contributors were affected by the job loss.
While the cutting cost measures adopted by public and private entities is leading to consistent loss of jobs, investigation showed that the lean prospect of finding a new job immediately after the loss of an earlier job, was responsible for increase in demand to access 25 per cent of pension contributions.
The PRA 2014 allows contributors, under the age of 50 years, who were disengaged from work and were unable to secure another job within 4 months of disengagement, to access 25 per cent of their respective Retirement Savings Accounts (RSAs).
Moreover, while some firms in both public and private sectors have downsized, some are preparing to lay-off more workers in the current year, in a bid to cut their expenditure, meaning that, more workers are going to be disengaged, hence, more pension contributors would demand for 25 per cent of their RSA balance in the current year.
Some of the beneficiaries, industry sources disclosed, are investing this money in their business ideas in a bid to be self-employed, while some used it to meet their more immediate financial needs.
Answering question posted to him by LEADERSHIP on this development at the weekend, head, Research & Corporate Strategy, PenCom, Dr. Farouk Aminu, said, the increase in the number of people accessing their pension account as a result of job loss was continuously increasing because of the harsh economic scenario that was making companies cut down on their budget, but noted that this intervention further showed the beauty of the Contributory Pension Scheme(CPS).
He said the law has further been enhanced to ensure that the disengaged workers were now able to access the fund four months after their disengagement unlike six months period it was before.
Speaking in an exclusive interview with LEADERSHIP some months ago, the managing director, AXA Mansard Pension Fund Administrator (PFA), Mr. Dapo Akinsanya, said the job loss showed the tough time the country was passing through noting that, the pension industry was performing one of its civic responsibility, by paying the 25 per cent pension contribution to these beneficiaries.
He said the industry was losing nothing as the investment income emanating from investment of pension assets far outweighs the payment made to these people. Believing that this would also enhances the integrity of the new pension scheme, he added that, the pension funds has been growing irrespective of whatever payment made out of it.