Business & Strategy

Over 8,600 RSA Holders Withdraw N14.20bn Amid Job Losses in Q1 2024

Written by Jerry Alomatu on June 13, 2024

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In the first quarter of 2024, approximately 8,651 Retirement Savings Account (RSA) holders withdrew a total of N14.20 billion due to temporary job loss, according to a recent report by the National Pension Commission (PenCom).

PenCom received 8,702 requests from RSA holders seeking to access 25 percent of their RSA balances, but 51 requests were rejected as the applicants were over 50 years old. The majority of the approved requests, 8,167, came from the private sector, while the remaining 484 were from the public sector.

The increase in job loss requests coincided with the Central Bank of Nigeria’s (CBN) decision to hike the Monetary Policy Rate (MPR) to combat inflation, a move that economists and private sector members predicted could lead to further job losses and possibly a recession.

PenCom’s report indicated that it approved N14.20 billion for the 8,651 RSA holders under the age of 50. As of the end of 2023, the commission had received 510,148 requests for withdrawal of 25 percent of RSA balances, approving 493,156 and rejecting 16,992 requests, with most requests originating from the private sector. The total amount approved by the end of 2023 was N223.99 billion.

In terms of En Bloc payments, PenCom received 4,042 requests from retirees in the first quarter, approving 3,936 requests amounting to N2.56 billion. These retirees had RSA balances insufficient to provide a monthly pension of at least one-third of the prevailing minimum wage (N30,000). The majority of approvals, 3,691, were from the private sector, with 245 from the public sector.

Additionally, PenCom processed and issued 17,317 Pension Clearance Certificates (PCCs) to organizations that met the requirements, resulting in N69.82 billion being remitted into the RSAs of 197,040 employees.

The commission also recovered N2.194 billion from 31 defaulting employers, comprising N751.51 million in principal contributions and N1.443 billion in penalties. Legal actions have been requested against three defaulting employers by the commission’s Secretariat/Legal Advisory Services Department.