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Chuks Udo Okonta
The National Pension Commission (PenCom) as part of its transformative initiatives, has empowered retirees to access outstanding Retirement Savings Account (RSA) balance as lump sum, having deployed part of their fund to procure pension benefits that can provide half of their last salary prior to retirement.
The initiative gives retirees an opportunity to access about 70 per cent of their RSA balance as lump sum, provided their monthly pension benefits is up to half of their last salary before retirement.
Speaking on the development, the Director-General of PenCom Ms. Omolola Oloworaran, at the PenCom Journalist Workshop with the theme; ‘Tech-Driven Transformation: Shaping the Pension Landscape’, held yesterday in Lagos, noted that to further enhance contributors’ experiences, PenCom has introduced a revised programme withdrawal template, simplifying access to voluntary contributions and revising the threshold for en-bloc payments in line with the new minimum wage.
According to her, these measures are designed to make retirement processes more efficient and user-centric.
She submitted that PenCom has lifted the restriction of lump sum access to a maximum of 50 per cent of the Retirement Savings Account (RSA) balance to enable retirees with sufficient funds to obtain a significant lump sum amount.
She said the Guidance Note on the Revised Programmed Withdrawal Template Version 2 gives retirees access to a lump sum from the balance standing to the credit of their Retirement Savings Account (RSA), provided that the amount left after that the lump sum withdrawal shall be sufficient to procure an annuity or fund programmed withdrawal that will procure an amount not
less than 50 per cent of their annual remuneration as at the date of retirement.
She noted that the revised programmed withdrawal template also removed the retirement age limitation and now accepts 65 years and above to accommodate the broader categories of retirees in the different sectors of the economy.
The new rule applies only to employees who retire under the Contributory Pension Scheme (CPS) and are yet to be programmed as at the release date of the revised programmed withdrawal template version 2, she posited.
According to her it also covers retirees who choose the programmed withdrawal as their preferred mode of retirement benefit payment or Retiree Life Annuity (RLA) option at retirement as at the release date of the programmed withdrawal template version 2.
According to her the guidance note seeks to provide PFAs with a standard procedure for calculating retirement benefit such as lump sum, monthly/quarterly pensions and pension arrears, using age, gender, final salary, the RSA balance, pension arrears and the A55 adjusted mortality table for eligible retirees.
Ms. Oloworaran said the theme of the conference, “Tech-Driven Transformation: Shaping the Pension Landscape,” couldn’t be more fitting, noting that technology has become the backbone of transformation across all sectors, and the pension industry is no exception.
She stressed that PenCom has embraced the transformation wholeheartedly, adding that there are now over 10.5 million contributors and pension assets in excess of N21.9 trillion as at October.
“This progress demonstrates the strength of our contributory pension system, but we are not without challenges.
“Inflation, for instance, continues to erode the purchasing power of pensioners, and we are actively seeking innovative solutions to address this issue,” she said.
She noted that the the Commission has continued to face the persistent issue of delays in the payment of accrued rights, adding that recently, N44 billion was approved under the 2024 budget appropriation to settle accrued pension rights for retirees from March to September 2023.
“Moving forward, we are working with the Federal Government to put in place a sustainable solution that ensures retirees receive their benefits promptly and without undue stress,” she submitted.
Giving her score card, she said since assuming office, her team has been focused on strengthening compliance, enhancing service delivery, diversifying pension assets to optimize returns, improving benefits, and expanding coverage to include more Nigerians, especially those in the informal sector.
“The micro-pension initiative, in particular, is something we are very passionate about. It is our way of saying that no one should be left behind, no matter how small their earnings might be.
“Technology plays a vital role in driving this inclusion, from mobile enrollment to real-time account management to benefits administration. We intend to use technology to scale the micro-pension plan.
“Permit me to talk briefly about some of our initiatives. This year, we achieved a major milestone with the launch of the e-Application Portal for Pension Clearance Certificates (PCC) in October. This initiative replaces the previous manual process, enabling companies to seamlessly apply for and receive PCCs online. Since its deployment, we have issued over 38,000 PCCs, significantly enhancing ease of doing business and ensuring compliance.
“Additionally, the Pension Industry Shared Service Initiative is in advanced stages of implementation. This initiative will digitize pension contributions and remittances, ensuring seamless processing of contributions and resolving discrepancies caused by incomplete remittance details,” she said.
According to her,
beyond policies and systems, what really excites her is the potential to transform lives, stressing that every time she meets a pensioner who is able to live comfortably because of the contributions they made during their working years, it reminds her of why the work is so important. “And every time I hear from a young entrepreneur or artisan who has signed up for the micro-pension scheme, it strengthens my belief that we are moving in the right direction,” he submitted.
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