CPS: PFAs Pay N1.63tn to Retirees as Pension Benefits in 15 Years

Ebere Nwoji

Pension Fund Administrators (PFAs), in the country have said that they have paid a total sum of N1.63 trillion to retirees in both public and private sectors under both progrmme withdrawal and life annuity in the past 15 years.

The PFAs said the above figure was paid to 442,000 Nigerians who retired from services in various employments in the country during the period.

The administrators speaking under the aegis of Association of pension fund Operators of Nigeria (PenOp) disclosed this at a media parley organised by PenOp in Lagos.

Speaking on the theme, “At the Dawn of 20 Years of Pension Reform What Are the Gains?” the Chief Executive Officer, PenOp, Oguche Agudah said out of the N1.63 trillion lump sum paid on both life annuity and programme withdrawal, in the second quarter 2023, total life annuity payment stood at N665.1 billion.

According to him, 111.708 applicants received the amount.

He said in third quarter 2022, a total of N595.22 billion was paid to 102,696 applicants as annuity lump sum.

He said in third quarter 2019, a total of N386.30 billion was paid as annuity life lump sum to 71,214 applicants while a total of N101.96 billion was paid to 20,615 applicants in the third quarter 2015, and in third quarter 2011, N1.51 billion was paid to 331 applicants as annuity.

Oguche said under programme withdrawal, in second quarter 2023, a total of N964 billion was paid to 339,201 applicants as lump sum under programme withdrawal while in third quarter 2022, N887 billion was paid to 315, 112 applicants in third quarter 2022. He added that in third quarter 2019, a total of N 589 billion was paid to 117,502 applicants under the programme withdrawal while in third quarter 2015, N288 billion was paid to 117,502 applicants and in third quarter 2011, a total of N99 billion was paid to 35,419 applicants.

The annuity and programme withdrawal systems are two windows through which retirees under the Contributory Pension Scheme receive their retirement benefits.

He insisted that twenty years down the line the Contributory Pension Scheme instituted by the former President Olusegun Obasanjo has recorded significant growth with the total assets now standing at N17.65 trillion as at October this year.

Also speaking, Head of Surveillance Department, PenCom, Dr Ehimeme Ohioma said the three key issues in pension management which all PFAs must not joke with were adequacy, sustainability and service delivery.

According to him, pension payment must be adequate for retirees to solve their problems.

He however said for pension payment to be adequate, workers and their employers must contribute adequately because a worker’s contributions determine his payment at retirement.

He said the pension system must be sustained to ensure continuity.

To ensure continuity, he advised that the managers must ensure that in this period of inflation, return on investment was above inflation.

He said this could be done through right choice of investment instruments and windows.

On service delivery, Ohioma said pension administrators must bear in mind that there must always be complaints from the contributors.

He said this being the case, it behooves operators and regulators to ensure that the complains were perfectly treated.

He said this explains why PenCom increased the capital of operators to ensure they have critical infrastructures to be able to serve the public.

He highlighted capacity as another critical factor in ensuring successful pension management. 

He said pension fund managers must constantly updated their skill to meet acceptable standard.