Economic Hardship: Nigerians rush to withdraw N9.2bn from their pension savings

• According to the PenCom second quarter report, RSA holders took N23.4 billion out of their accounts during that time
• Slower withdrawals are evident in the second quarter report; in Q2'24, 5,528 RSA account users took N9.2 billion out of their accounts
• A few industry observers attributed the higher number in Q1'24 to the yearly financial difficulties that typically begin the year

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

The second quarter report provided by the National Pension Commission, PenCom has shown that the RSA holders withdrew N23.4 billion during the period.

However, the second quarter report reveals slower withdrawals as a total of 5,528 RSA account holders withdrew N9.2 billion in Q2’24, as against 8,651 RSA holders’ that took N14.2 billion in the first quarter.

However, the Vanguard reported that a few industry watchers ascribed the increased figure in Q1'24 to the customary financial challenges that start the year.

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The PenCom report for Q2’24 stated,

“Out of the 5,528 applicants whose benefits were approved, 5,223 were from the private sector, while the remaining 305 were from the public sector. The sum of N9.3 billion was approved for the 5,528 RSA holders under the age of 50 years.”

Regarding financing for residential mortgages, the report noted that during the reviewed quarter, 1,390 RSA holders sought to use up to 25% of their RSA balances to pay equity contributions for residential mortgages. A total of 1,234 requests totalling N10.5 billion were approved, while 156 requests were denied because the required paperwork was incomplete.

Abdullateef Salami who lost his job earlier in the year due to job cut at his office lament how feeding has been difficult.

He said,

"The last few months hasn't been easy ever since losing my job. Luckily, for me, I had my pension to turn to."

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Legit.ng reported that Joe Ajaero, the president of the Nigeria Labour Congress (NLC), has demanded an increase in the lump sum payment on retirement to 50% under the Contributory Pension Scheme (CPS) to enable retirees to begin a comfortable retirement life.

The Contributory Pension Scheme (CPS) was introduced in Nigeria to replace the old pension system and provide a more sustainable retirement plan.

Joe Ajaero, at a programme on retirement in Abuja, highlighted the sad reality facing retirees, where pension values have dwindled in the face of inflationary pressures.

Source: Legit.ng