There are indications that economic hardship is forcing employees to eat deep into their pension savings held in Retirement Savings Account, RSAs.
Vanguard findings show that RSA account holders under the Contributory Pension Scheme, CPS, withdrew N3.02 billion from their Additional Voluntary Contribution, ADV, in the first quarter of 2023, Q1’23.
The figure represents a 240.1 per cent rise from N887.9 million recorded in the fourth quarter of 2022, Q4’22.
The National Pension Commission, PenCom, report for first quarter 2023, Q1’23, shows the number of RSA holders that withdrew from their ADV increased quarter-on-quarter, QoQ, to 1117 during the period, about 94.6 per cent higher than the 574 in the preceding quarter, Q4’22.
Additional Voluntary Contributions, ADV, are extra funds that a worker can opt to add to his/her mandatory pension contributions, or simply set aside as retirement savings.
The Pension Reform Act (PRA) 2014 allows employees to make ADV into their RSA, in addition to their mandatory pension contributions, with the sole aim of enhancing their retirement benefits.
Meanwhile, a breakdown of the performance of the Pension Fund Administrators, PFAs, in RSA registrations in Q1’23 show that Stanbic IBTC continued to maintain the largest market share of 28 per cent with 23,586 new registrations.
This was followed by Access Pensions Limited which had 11 per cent market share with 9,546 new registrations, while ARM Pension Managers Limited was third with 9.2 per cent market share recording 9,546 new registrations.
Leadway Pensions recorded 8.8 per cent market share with 6,430 new registrations, while Premium Pension Limited followed with seven per cent market share of 6,044.
On the bottom of the performance table are NPF Pensions Managers with only 131 new RSAs which represent 0.001 percent of total registrations.
Nigerian University Pension Management Company was next with 179 new RSAs which represent 0.1 per cent of total registrations. Guaranty Trust Pensions Managers Limited followed with 879 new RSAs which represent 1.1 percent of total registrations
https://www.vanguardngr.com/2023/08/economic-hardship-workers-withdraw-n3bn-from-pension-savings
This is serious