Contributory Pension: N501bn Paid To Retirees By PFAs

Pension Fund Administrators from 2007 to 2017  have paid out N501.4bn as lump sum to 293,869 retirees under the Contributory Pension Scheme.

Figures gotten from the National Pension Commission shows that the CPS retirees earned an average monthly pension of N7.47bn during the period.

Under the CPS, once a retiree begins to draw pension, having completed the required initial documentation, he will continue to receive monthly pension as and when due without the seemingly unstoping verification that is obtainable in the old Defined Benefits Scheme.

According to the figures, the PFAs paid out lump sums of N14.92bn, N31.79bn and N16.29bn to the retirees in the first, second and third quarters of the 2017 financial periods.

The retirees also earned N196.9m, N422.13m and N302.06m average monthly pensions during the first three quarters of last year.

In December last year, PenCom revealed that the operators were making significant profits from investments, and asked them to raise the stipends of retirees who opted for programmed withdrawal and were being paid by the PFAs.

The Acting Director-General, PenCom, Aisha Dahir-Umar, stated this when the commission submitted a memorandum to the Senate Committee on Establishment and Public Service at a public hearing on a bill for an Act to amend the Pension Reform Act, 2014 to provide for definite percentage a retiree could withdraw from his Retirement Savings Account and for other matters related thereto.

She, however, said that some retirees would not be entitled to the increase due to the low amounts in their RSAs.

Dahir-Umar said, “Indeed, the commission has just concluded an exercise to increase the monthly pension of all retirees on programmed withdrawal due to the income earned on investing their pension assets.

“The outcome of this exercise showed that 30 per cent of the retirees will not benefit from the increase due to insignificant income earned on the small balances in their respective RSAs.”