In response to the economic challenges, there was a significant increase in workers making withdrawals from their voluntary pension contributions in the first quarter of 2024, rising by 87.6% compared to the previous quarter.
Specifically, the number of workers making withdrawals from their voluntary contributions surged to 1,302 in Q1’24, up from 694 in the preceding quarter, Q4’23. The value of funds withdrawn also saw a substantial increase of 160%, amounting to N3.9 billion in Q1’24, compared to N1.5 billion in the previous quarter.
According to the report released by the National Pension Commission, PenCom, 1,259 workers who made the withdrawals were from the private sector, while 43 were from the public sector. Voluntary Contributions are additional funds that workers can choose to add to their mandatory pension contributions or save separately for retirement.
Under the Pension Reform Act (PRA) 2014, employees are allowed to make voluntary contributions into their Retirement Savings Accounts (RSAs) to enhance their retirement benefits.
The report stated: “Approvals were granted to 1,302 RSA holders to access N3.9 billion of their voluntary contributions during the quarter under review, while 24 were rejected due to incorrect computations. 1,259 RSA holders whose benefits were approved were from the private sector, while 43 were from the public sector.”
Regarding RSA holders’ requests to access their pension savings for mortgages, the report stated: “A total of 1,390 RSA holders requested to access up to 25% of their RSA balances towards payment of equity contributions for residential mortgages during the quarter under review. Approvals were granted to 1,234 requests amounting to N10.5 billion, while 156 were rejected due to incorrect documentations. Out of the 1,234 applicants whose benefits were approved, 379 were from the private sector, while the remaining 855 were from the public sector.”
Further analysis of the report shows that a total of 89,061 new RSAs were registered in different sectors in the quarter ended 31 March 2024.
Analysis of the RSA registrations across Pension Fund Administrators (PFAs) revealed that Stanbic IBTC Pension Managers had the largest market share of 23.9% of new registrations with 21,288 contributors registered, followed by Access Pensions Limited, which had 22.5% with 20,042 new contributors registered. ARM Pension Managers Ltd, Leadway Pensure PFA, and Premium Pension followed with 8.4%, 7.1%, 7.0% of the new registrations during the quarter respectively. The top five PFAs collectively held 68.8% while the bottom five PFAs recorded an aggregate of 4.3% of the 89,061 new RSAs registered in Q1’24.
