Fakoyejo OlalekanThe National Pension Commission (PENCOM) has refunded the pension contribution of 2,084 retirees after failing to surpass the required amount to earn a lump sum and annuity payment from life insurance companies.
According to the government agency’s first quarterly report on ‘Enbloc Payment of Retirement Benefits, the refund to private and public retirees amount to N519.51 million.
Employees in the private and public sector who couldn’t contribute over N550,000 before retirement are to be refunded their balance upon retirement, according to the Pension Reform Act 2014.
The retired workers are also allowed to exit the Contributory Pension Scheme. The act translates the retirees who fall under N550,000 are not qualified for monthly Retirement Savings Accounts (RSA).
They have an insufficient account to receive programmed withdrawal from the RSA or retiree life annuity paid by life insurance companies, both of which comes monthly for an expected life span.
“During the quarter under review, the commission approved en bloc payment of retirement benefits to 2,084 retirees whose RSA balances were N550,000 or below and considered insufficient to procure programmed withdrawal or retiree life annuity of a reasonable amount for an expected life span.
“In this regard, a total sum of N519.51m was paid to the 2,084 retirees from both the public and private sectors.” The National Pension Commission revealed in the first quarter report.
Reasons some workers were unable to surpass the N550,000 mark has also been blamed on companies debiting pension from employees’ salary, but failing to remit to the pension scheme.
Prime Business Africa had previously reported that PENCOM fined 23 companies N295.45 million for defaulting in their contribution in First Quarter (Q1) 2022, while recovering N124.89 million principal contribution expected from the companies.
Bringing the total amount collected from the defaulting companies to N422.34 million. In the corresponding period of first quarter 2021, PENCOM had recovered a total N608.55 million from defaulters.
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