Don't Miss

104,161 ex-workers withdraw N33.9bn fr­om pension savings

By on September 21, 2015

No fewer than 104,161 ex-workers, who contributed about N135.6bn to the Contributory Pension Scheme, have withdrawn N33.9bn from their Retirement Saving Accounts as of the end of March.

Data obtained by our correspondent from the National Pension Commission on Monday showed that the contributors comprised of those who were either sacked or had voluntarily resigned from paid employment for at least four months.

Of recent, many contributors, who either do not see the need to wait till they reach the retirement age or are desperately in need for money, have been utilising every avenue opened by the Pension Reform Act, 2014 to get part of their pension savings.

The data obtained from PenCom showed that at the end of the 2013 financial period, 36,369 workers from both the public and private sectors and who had N29.8bn as their RSA balance, had withdrawn N7.4bn from their various PFAs.

The number of contributors who withdrew from their RSAs rose to 96,708 at the end of 2014. Out of these, 92,245 were from the private sector, while 4,463 were public workers. With a total contribution of N126.4bn in their pension accounts, the contributors withdrew N31.6bn at the end of last year.

In the first quarter of 2015, PenCom revealed that 7,453 workers, with total contribution of N9.1bn, withdrew N2.2bn from their RSAs.

Section 7 (2) of the PRA 2014 allows a worker who voluntarily retires, resigns or is disengaged from paid employment to access 25 per cent of his RSA if he is unable to get another job after four months.

The essence is to allow the worker to have some funds to live on or invest in productive ventures pending the time he is able to have a stable source of income.

To access the fund, an individual is required to present some documents to his PFA, including the letter of termination of appointment issued by the employer or letter of resignation; last three months’ payslips; letter requesting for 25 per cent payment of the RSA balance; and evidence of accrued pension rights, if any, for public sector workers.

Others are bank statement or letter of introduction from the bank; proof of age (birth certificate or sworn declaration of age); letter from the employer confirming full remittance of all contributions made to the RSA for the private sector worker; PenCom retiree indemnity form for public sector workers; four passport photographs; and a form to be given by the PFA.

Another condition on which contributors can withdraw a maximum of 25 per cent of their savings with their PFAs is if the workers want to access the fund for mortgage loan.

So far, no worker has accessed the money for mortgage loan because the National Pension Commission has only released the draft guideline for such but has yet to announce the commencement date.

Section 3.5 of the draft guidelines on withdrawals from the RSA towards equity contribution for the payment of residential mortgage states that an eligible RSA holder shall be allowed to access a maximum of 25 per cent of the account balance as equity contribution for a mortgage loan.