Pension Funds: Sacked Employees Withdraw N113.2bn

  • Pension Funds: Sacked Employees Withdraw N113.2bn

The rising number of retrenched employees in the Nigerian labour market continues to impact the size of pension assets as companies strive to cut costs and stay afloat amid growing market uncertainties.

As of June 2019, a total number of 324,141 sacked employees have withdrawn at least N113.2 billion from the N9.3 trillion pension assets, the National Pension Commission (PenCom) stated.

According to PenCom, “approval was granted for the payment of N5.28 billion to 10,673 RSA holders who were under the age of 50 years and were disengaged from work and unable to secure another job within four months of disengagement in the second quarter of the year.

“The cumulative total number of RSA holders who were paid benefits for temporary loss of job was 324,141 and were paid a total of N113.21 billion being 25 per cent of the balances of their RSAs as prescribed by the Pension Reform Act 2014.

“A further analysis showed that the private sector accounted for 95.33 per cent of those who benefitted from these payments while the public sector accounted for 4.67 per cent.”

A breakdown of PenCom document also indicated that the private sector accounted for 308,993 of the total sacked workers and collectively they withdrew N107.9 billion from their pension contributions.

The remaining 15,148 workers were from the public sector with the federal government sacking 8,361 staff members while the states set free another 6,787 staff. Together, the sacked public workers withdrew N5.3 billion during the period.

Also, the report showed about 10,673 workers — 10,006 private and 666 public staff — who were sacked in the second quarter of the year (April – June) withdrew N5.2 billion from their pension accounts.

Poor new job creation amid tough business environment continues to weigh on the labour market despite Nigeria’s unemployment rate currently at a record high of 23.1 per cent or 20.9 million of the working population.

The Central Bank of Nigeria recently mandated banks to maintain 60 per cent loan-to-deposit ratio in an effort to stimulate growth across sectors and boost job creation.

Experts, however, call for caution, especially with the current headwinds and the central bank not liquid enough to bail out lenders following AMCON failure to recover over N5 trillion previously injected into the economy.

Meanwhile, crude oil rose above the Federal Government benchmark for 2019 on Monday. Presently trading at $62 a barrel after plunging below $60 per barrel stipulated in the 2019 budget.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: samed@investorsking.com.

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