PFAs paid N203 billion to RSA Holders in 2021
The National Pension Commission (PenCom) has disclosed that a total of N203.35 billion was paid by Pension Fund Administrators (PFAs) as retirement benefits in the year 2021.
The amount paid by PFAs in the year 2021 represents a 5.27% increase compared to the N193.17 billion paid in the year 2020.
Out of the N203.35 billion paid by PFAs in the year 2021, Retirees on Programmed Withdrawal top the list of withdrawals from Retirement Savings Account (RSAs) with a total withdrawal of N97.73 billion, followed by Death Benefits N45.22 billion, Retirees on Annuity N31.04 billion, 25% withdrawal N21.53 billion, Voluntary Contributions withdrawal N5.40 billion and Enbloc withdrawal N2.44 billion.
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Retirees on Programmed Withdrawal
The total number of retirees who opted to receive their pensions under the Programmed Withdrawal agreements with Pension Fund Administrators (PFAs) in the year 2021 was 27,843 (public sector 11,123 and private sector 16,720). The sum of N96.38 billion was paid to retirees as lump sum while N1.34 billion was paid as monthly programmed withdrawals, making a total of N97.73 billion paid to retirees on programmed withdrawals in the year 2021, a decrease of 11.03% compared to the N109.84 billion paid to retirees on programmed withdrawals in the year 2020.
Retirees on Annuity
These are retirees who have chosen to receive their pension via annuity provided by Life Insurance companies. The total number of retirees who received their retirement benefits through the annuity plan in the year 2021 was 9,220 (public sector 4,484 and private sector 4,736). The sum of N30.41 billion was paid as lump sum while N626.48 million was paid as monthly/quarterly annuity pension payments to the retirees, making a total of N31.04 billion paid to retirees on annuity plan in the year 2021, an increase of 18.90% compared to the N26.10 billion paid to retirees on annuity plan in the year 2020.
Retirees Enbloc Withdrawal
These are retirees whose Retirement Savings Account (RSA) balances were N550,000 or below and considered insufficient to procure a Programmed Withdrawal or Annuity Plan for a reasonable amount over an expected life span, and the retirees were subsequently paid the total balance in their RSAs. The sum of N2.44 billion was paid to 9,833 retirees (public sector 137 and private sector 9,696) as Enbloc payments during the year 2021, a decrease of 1.61% compared to the N2.48 billion paid as Enbloc in the year 2020.
25% Withdrawal
25% Withdrawal is a temporary access to Retirement Savings Account (RSA) for withdrawal of 25% of RSA balance for employees who were disengaged, resigned or retired from employment before the age of 50 years and were not able to secure another employment after 4 months. The sum of N21.53 billion was paid to 38,846 RSA holders (public sector 2,600 and private sector 36,246) as 25% withdrawal during the year 2021, an increase of 6.06% compared to the N20.30 billion paid as 25% withdrawal in the year 2020.
Death Benefits
Death benefit represent payments to beneficiaries of deceased Retirement Savings Account holders. The sum of N45.22 billion was paid to 8,812 (public sector 6,356 and private sector 2,456) as death benefits payments for the year 2021, an increase of 44.63% compared to the N31.27 billion paid as death benefits in the year 2020.
Voluntary Contribution
A voluntary contribution is an additional contribution made by a RSA holder. A RSA holder making voluntary contributions can withdraw 50% of the voluntary contribution (per contribution) made into his RSA after 2 years of such contribution, and the balance of 50% shall be available for withdrawal upon retirement of the contributor from active employment. The sum of N5.40 billion was paid to 3,071 RSA holders (public sector 116 and private sector 2,955) as voluntary contribution payments in the year 2021, no comparative figures because PenCom only started including voluntary contribution payments in its report from the 3rd quarter of 2020.
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