Public, Private Pension Contributions Rise to N11tn – Report
A report on 20 years of pension reforms in Nigeria obtained on Thursday showed that pension contributions from the public and private sectors rose to N11tn in the second quarter of 2024.
The Chief Executive Officer of the Pension Fund Operators Association of Nigeria, Oguche Agudah, made presentations from the report at the annual conference of the Pension Correspondents Association of Nigeria in Abuja.
He said public sector contributions amounted to N5.72tn, while the private sector contributed N5.23tn, stressing that this marked a significant increase from the previous years.
He highlighted the steady rise in both public and private sector contributions, attributing the growth to increased confidence in the pension system.
“The collaboration between public and private sectors is driving the pension industry to new heights, and we are seeing the results in terms of assets and contributions,” Agudah said.
Agudah also noted the remarkable growth in pension investments in corporate debt, which hit N2.25tn in Q2 2024, compared to N1.48tn in Q3 2022 and N621.96bn in Q3 2019.
“This is a testament to the stability and evolution of the pension industry over the past two decades, and we are poised to continue growing these numbers with strong governance and strategic investments,” he added.
The report also highlighted increases in pension payouts. In Q2 2024, N1.1tn was paid to 129,435 life annuity applicants, up from N798.14bn paid to 102,696 applicants in Q3 2022.
Similarly, programmed withdrawals rose to N1.12tn for 357,310 applicants, compared to N887.6bn in Q3 2022.
For job losses, 25 per cent of the Retirement Savings Account withdrawals amounted to N247.47bn in Q2 2024, up from N182.2bn in Q3 2022. Death benefits also surged to N451.2bn for 104,259 employees in Q2 2024, from N310.43bn for 83,533 employees in Q3 2022.
The total pension industry assets reached an all-time high of N20.87tn by July 2024, a rise from N14.42tn in Q3 2022 and N9.58tn in Q3 2019.
“We are seeing increasing participation from Nigerians as awareness grows about the importance of securing their future through pensions,” Agudah said.
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By Q3 2024, Retirement Savings Account registrations had grown to 10,280,956, up from 9,792,482 in Q3 2022 and 8,838,835 in Q3 2019. This reflects the expanding confidence in the system, as pension reforms continue to secure retirements for Nigerians.
Speaking at the conference, the acting Director-General of the National Pension Commission, Ms Omolola Oloworaran, represented by the Head of Corporate Communications, Ibrahim Buwai, reflected on Nigeria’s pension reform journey.
“The consistent accumulation of pension fund assets since the commencement of the Contributory Pension Scheme remains a key performance indicator. This is made even more significant considering the over N2tn estimated pension liabilities before June 2004. This clear transformation resulted in the rise of total Pension Fund Assets under management to N20.87tn as of July 2024,” she stated.
Oloworaran also spoke about initiatives like the Micro Pension Plan, aimed at including informal sector workers, and the launch of the Online Enrolment Application for prospective retirees.
“The consistent growth in RSA registrations and pension assets has been enabled by sound regulations and stringent oversight from PenCom,” she added.
“Other notable initiatives by PenCom include the Pension Enhancement Exercise, which ensures the periodic enhancement of retirees’ pensions due to growth in their RSA balances.
“The most recent pension enhancement conducted in 2023 benefited many retirees. Furthermore, the introduction of the Guidelines on Accessing RSA Balance for Residential Mortgages has made a positive impact on contributors. RSA holders can now use a portion of their pension savings as equity contributions for residential mortgages.
“This initiative has already empowered over 5,000 workers to achieve home ownership, with N47.13bn disbursed as equity contributions from their RSAs to mortgage lenders,” she added.
The Executive Secretary of the Pension Transitional Arrangement Directorate, Chioma Ejikeme, represented by the Head of Communication at PTAD, Olugbenga Ajayi, spoke on the progress being made by PTAD.
Ejikeme said, “PTAD has always been at the forefront of ensuring an enabling environment for pensioners, and since inception, we have consistently paid pensions as due.”
SOURCE: The PUNCH