Employees withdraw N3 billion from pension savings due to financial difficulty

There are signs that employees are being forced by economic hardship to deplete their retirement funds kept in Retirement Savings Accounts (RSAs).

According to Vanguard research, in the first quarter of 2023, or Q1’23, RSA account holders under the Contributory Pension Scheme, CPS, withdrew N3.02 billion from their Additional Voluntary Contribution, ADV.

The sum indicates an increase of N887.9 million, or 240.1%, from the fourth quarter of 2022, or Q4’22.

According to the first quarter 2023, Q1’23, data from the National Pension Commission, or PenCom, 1117 RSA holders withdrew from their ADV during the quarter, up roughly 94.6 percent from the 574 in the previous quarter, Q4’22.

The term “Additional Voluntary Contributions,” or “ADV,” refers to additional cash that an employee may choose to contribute to his or her required pension payments or merely place aside as retirement savings.

Employees are permitted to make ADV into their RSA in addition to their required pension contributions under the Pension Reform Act (PRA) 2014, with the sole objective of boosting their retirement benefits.

Stanbic IBTC continues to hold the greatest market share of 28% with 23,586 new registrations, according to a breakdown of the performance of the Pension Fund Administrators, or PFAs, in the RSA registrations in Q1’23.

Access Pensions Limited came in second with an 11% market share and 9,546 new registrations, while ARM Pension Managers Limited came in third with a 9.2% market share and 9,546 new registrations.

Leadway Pensions had an 8.8% market share with 6,430 new registrations, while Premium Pension Limited came in second with 6,044 registrations and a 7% market share.

NPF Pensions Managers are at the bottom of the performance leaderboard with just 131 new RSAs, or 0.001 percent of all registrations.

The following company, Nigerian University Pension Management Company, registered 179 new RSAs, or 0.1% of all registrations. Following with 879 new RSAs, Guaranty Trust Pensions Managers Limited accounted for 1.1 percent of all registrations.