As Economy Bites, Sacked Nigerian Workers Turn to Pension Savings Before Retirement To Survive

• Nigerians who lost their jobs and could not get another were forced to request 25% of their pension savings to survive
• The Pension Reforms Act (PRA) allows pension fund contributors who can not secure a job within a specific period, to access pension savings
• Following the 25% withdrawal, the balance is paid to them as a pension every month if they cannot still get a job

The National Pension Commission (PenCom) has disclosed that 13,126 Nigerian workers who lost their jobs and are still under 50 withdrew N12.56 billion from their pension fund contributions in the first three months of 2023.

PenCom disclosed this in its first-quarter report published on its website and obtained by Legit.ng.

How the pension withdrawal works

The withdrawal by the sacked workers is in line with the provisions of the Pension Reforms Act 2014, which allows pension fund contributors to withdraw 25% of their contributions if they lose their jobs and have not found any within four months.

Read also

"Alert rain": Massive jubilation as Benue workers receive first salary in 7 months

The 25% withdrawal from RSA represents a lifeline for job seekers who need money to survive while they continue seeking other sources of income.

Pension withdrawal trend

According to data from PenCom, the 13,126 workers who withdrew from their pensions were former public and private sector employees.

A detailed breakdown reveals that 12,656 of the sacked workers were from the private sector, 211 were previously employed in the state government, and 259 were former federal government employees.

The report also highlights that since the Contributory Pension Scheme (CPS)'s inception, 444,946 sacked private workers have withdrawn funds from their pensions before retirement.

Furthermore, 13,411 sacked state workers and 8,455 federal government workers have been compelled to withdraw from their pensions since the establishment of CPS in June 2004.

Read also

Updated: Discos alert Nigerians on electricity tariff increase from July 1, advice on saving cost

Nigerians struggling to survive

In recent years, Nigerians have suffered massive job losses due to the economic downturn, companies downsizing, and technological advancements.

For example, in the banking sector, which is the biggest employer of labour, the total number of employees dropped by 11.1% between 2018 and 2021.

Nigerian workers rank as world's 2nd most hardworking

Meanwhile, in another report, Nigerian workers have been rated as the second most hardworking people, with an average of 2,124 hours spent a year

The time Nigerian workers spend in the office surpassed the global average of 44.1 hours per week.

Despite the time spent, Nigerian workers' minimum wage is far less than in most African countries.

Source: Legit.ng