About 320 workers who left their paid employment on health grounds before the stipulated retirement age under the Contributory Pension Scheme have been paid a lump sum of N174.01m by their Pension Fund Administrators, NIKE POPOOLA reports
No fewer than 320 workers, who were certified by medical practitioners to have health challenges under the Contributory Pension Scheme, have been allowed to withdraw lump sums from their Retirement Savings Accounts with their Pension Fund Administrators, investigation has revealed.
Information obtained from the National Pension Commission revealed that the affected workers, who were not up to 50 years when they left paid employment due to deteriorating health, were given the rare privilege strictly on health grounds.
The Pension Reform Act 2014 stipulates that contributors can withdraw part of their pension savings if they lose their jobs and are unable to get another job after four months; or if they retire from work and are up to the age of 50.
For workers who lose their jobs, the law allows them to withdraw 25 per cent of the balance in their RSA.
But for those who reached the retirement age of 50 and are no longer in paid employment, they will be given 25 per cent lump sum and be placed on monthly pensions, or be given outright all their savings if the money is less than N550,000.
However, PenCom confirmed to our correspondent that workers not up to 50 years could also either get all their pension savings or start earning monthly stipends on medical grounds.
The commission explained that the retirement benefits on medical/health grounds related to the benefits of those who retired from employment on medical grounds as certified by qualified physicians or medical board.
PenCom stated, “The cumulative amount paid to 320 retirees on medical grounds from inception stood at N174.01m, while the cumulative average monthly pension from inception was N18.85m.”
Out of the figure, 64 of the workers were from the Federal Government, two from the state governments, while 254 were private sector workers.
Speaking with our correspondent, the Head, Research & Corporate Strategy, PenCom, Dr Farouk Aminu, said the medical report to be presented by the applicant must be from a recognised hospital.
He said, “A certified physician must certify that the person can no longer continue working based on his health condition. The medical report is the criteria.”
Aminu explained that if the money in the worker’s RSA was less than N550, 000, the person would be given all the money in their account.
But if the money was more than N550, 000, which is the minimum threshold, he added that the person would be given a lump sum and be placed on a monthly pension.
According to him, those in this category will have to go to their PFA and submit all the necessary documents for processing.
Information obtained from the commission also revealed that it received nine reported cases of missing persons which were at various stages of review.
Meanwhile, to enhance compliance under the CPS, the commission said a road map covering a period of 12 to18 months was developed for the engagement of labour unions, state employees, state governments and other stakeholders, to positively influence state compliance.
As part of the efforts to deepen the financial sector, the commission said it would continue to partner with other regulatory agencies, other relevant government agencies and both local and international asset managers to encourage the development of new investible securities/asset classes for pension funds to further diversify and ensure the generation of above-inflation returns in the long run.
It stated that continuous focus would be placed on partnering with relevant stakeholders to ensure the availability of safe long-term investment outlets for pension funds that would impact on the real sector of the economy, especially housing.
“PenCom will continue to collaborate with other regulatory agencies to further develop the pension market and optimise the use of the pension fund assets for economic development,” it stated.
It said collaborations with regulators would be intensified such as the Securities and Exchange Commission and the Central Bank of Nigeria in finding ways to move the pension industry forward.
PenCom stated, “The commission continued to apply various strategies to ensure compliance with the provisions of the PRA 2014. These included the application of sanctions and collaboration with key stakeholders on public enlightenment campaigns as well as the engagement of defaulting employers through pension recovery agents employed by the commission to recover unremitted pension contributions.”
Meanwhile, retirees earning pensions under the CPS stood at 248,858 as of the end of September 2018.
PenCom said 191,566 retirees who opted for the Programmed Withdrawal option were being paid by the PFAs , while 57,302 retirees who opted for the Annuity were being paid by life insurance companies.