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Workers withdrew N2.18bn pension savings in Q3 – PenCom

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PenCom

An emerging report has claimed that no fewer than 1,286 workers under the Contributory Pension Scheme withdrew N2.18bn from the voluntary contributions in their Retirement Savings Accounts with their Pension Fund Administrators in the third quarter.

This was contained in the 2020 third-quarter report released by the National Pension Commission (PenCom)

The report read: “During the quarter under review, the commission granted approval for withdrawal of the sum of N2.18bn from the voluntary contribution accounts of 1,286 contributors.

“The guidelines on voluntary contribution under the CPS states that the main purpose of the Pension Reform Act 2014 is to introduce a pension system that is sustainable and has the capacity to achieve the ultimate goal of providing a stable, predictable and adequate source of retirement income for each employee in Nigeria.

“The Pension Reform Act 2014 allows employees to make, voluntary contributions into their Retirement Savings Account, in addition to their mandatory pension contributions, with the sole aim of enhancing their retirement benefits.

“Voluntary contributions under these guidelines shall be non-obligatory contributions made by any employee in the formal sector through the employer.

“Employees of organisations with less than three employees as well as self-employed persons as provided in Section 2 (3) of Pension Reform Act 2014 (PRA 2014) shall be covered under the guidelines for micro pensions.”

PenCom added that any eligible contributor under these guidelines must notify his employer in writing of his intention to make voluntary contributions and the amount be deducted from his emoluments and remitted as voluntary contributions.

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The commission also stated that voluntary contributions should be made from an employee’s legitimate income, which should not be more than a third of the month’s salary in line with the Labour Act, 1990.

According to the body, total voluntary contributions must be remitted through an employer into the RSA.

It noted that it has set out the modalities and broad guidelines under which voluntary contributions could be administered.

This Techeconomy.ng understands that the PenCom’s objectives of the guidelines are to establish a uniform set of rules for the operation of voluntary contributions and eligibility criteria for participation in voluntary contributions.

The commission added that it provided the procedure for making voluntary contributions, and necessary safeguards and modalities for its withdrawals.

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