PenCom Boss Highlights Why Industries with High Labour Turnover Should Pay Contributory Pension

Recovered N384.28m as pension contributions from defaulting employers in Q1 2023

The Director-General, National Pension Commission (PenCom), Aisha Dahir-Umar, has stated that industries with large labour turnover should pay contributory pension scheme to protect workers’ interest and address the need for their compensation, retirement benefits and severance packages.

She stated that the contributory pension would ensure that workers have accrued rights to particular funds as entitlement.

Dahir-Umar, who disclosed at the 2023 Labour Writers Association of Nigeria (LAWAN) workshop, in Lagos said the commission had recovered N384.28 million as pension contributions owed workers by defaulting employers in the first quarter (Q1) of 2023.

She also noted that the amount recovered by the commission from January 2023 to March 31, 2023, was N384.28 million. These, according to her was recovered from 34 defaulting employers.

Aisha Dahir-Umar who was represented by the Head of Corporate Communications, PenCom, Abdulqadir Dahiru, said the commission was committed to protecting workers’ interests and ensuring that employers pay pension contributions as and when due.

“PenCom is determined to ensure that Nigerian workers receive their retirement benefits in time. The commission’s meticulous regulation and supervision of the pension industry had ensured that pension assets and the contributory pension scheme (CPS) membership continued to grow,” she stated.

Speaking further on pension recoveries, she said the value of pension assets stood at N15.58 trillion as at March 31, while CPS membership was 9.95 million.

The PenCom DG said in 2022, the commission launched a policy allowing retirement savings account (RSA) holders to utilise a portion of their retirement savings as equity for mortgages.

She said the policy marked a significant milestone in the commission’s ongoing efforts to provide greater flexibility and access to pension funds for the benefit of RSA holders.

“We recognise that many individuals face challenges in securing adequate housing upon retirement, and we aim to address this issue by unlocking the value of their pension savings to facilitate homeownership.

“Under this new policy, RSA holders who have contributed to their accounts for at least five years and met specific eligibility criteria can utilise up to 25 percent of their pension savings as equity contribution towards acquiring residential properties.

“This policy aligns with our commitment to ensuring that pension funds catalyse economic development and social wellbeing.”

Dahiru-Umar also said RSA holders could access 25 per cent of their RSA balance to cushion the effect of job loss if they could not secure another employment after four months of job loss.

She said the partial withdrawal from RSA was to offer immediate support during a difficult period.

Dahiru-Umar added that the remaining balance in the RSA would continue to grow and accumulate until the RSA holder attains retirement age.

Speaking on pension inclusion of informal sector, Head Micro Pension Department, National Pension Commission, Dauda Ahmed, reiterated the need to facilitate financial inclusion in the informal sector through Micro Pension Plan.

According to him, the informal sector constitutes a large and persistent scale in any economy especially in Africa where the working population falls under the informal sector.

He said it was imperative to have these categories of workers captured in the financial inclusion map as a tool for economic development, particularly in the areas of poverty reduction, employment generation, wealth creation and improving welfare and general standard of living.