A recent study states that the Pension Fund Administrators have reported a profit of N7.98 trillion from the investments made by employees into their Retirement Savings Accounts under the Contributory Pension Scheme.
As of the end of the second quarter of 2023, the total funds under the CPS were at 17.37 trillion, according to the Pension Fund Operators Association of Nigeria. The total amount of contributions made during the reviewed period by employees in the public and private sectors was N9.37 trillion.
The report titled, ‘At the dawn of 20 years of pension reform, what are the gains?’ and released by the Chief Executive Officer, PenOp, Mr Oguche Agudah, showed that workers’ contributions accounted for 54 percent, while the return on investment accounted for 46 percent of the entire pension funds as of the end of June 2023 from the beginning of the CPS in 2004.
In order to lessen the impact of inflation on the funds, the pension operators acknowledged that the workers’ contributions were carefully invested and the returns were added to the workers’ pension savings.
Additional data revealed that at the end of 2023’s third quarter, the PFAs had collected N24.8 billion from employers who had fallen behind on their payments.
In Q2, 2023, N665.13bn was paid as a lump sum to annuity retirees and N964.24bn to retirees on planned withdrawal, for a total of N1.64tn to 442,000 retirees, according to the data from PenOp.
It further stated that 475,235 individuals who lost their jobs before reaching official retirement age and were unable to find new employment after four months received N208.86 billion in compensation.
Total death benefits paid to 91,214 beneficiaries amounted to N356.32bn in the second quarter of 2023. The report showed that 649 contributors got approval to access N7.89bn from their RSAs for residential mortgages.
While highlighting the expectations of the operators in 2024 and beyond, Agudah said, it was expecting to celebrate 20 years of the Pension Reform Act, show greater focus on micro pensions, and also look into the revision of investment guidelines. He added that the operators looked forward to more applicants and approvals for RSA mortgage, possible kick-off of offshore investment, and infrastructure consortium.
The report stated that the PRA was established as an Act to establish CPS for employers in the public, Federal Capital Territory, and private sectors in the country. Between 2007 and July 2023, it added, the contributors under the CPS rose from 2,543,178 to 10,023,314.
