About N4billion was disbursed to 12,464 workers, who lost their jobs across the country, from their pension’s contributions in the third quarter of 2016. The money was paid to them by their various Pension Fund Administrators (PFAs).
A report published by the National Pension Commission (PenCom), which revealed this, stated that the workers are holders of Retirement Savings Accounts (RSAs) under the Contributory Pension Scheme (CPS).
According to the report, they were paid 25 per cent each out of their total contributions, putting the amount paid at N4 billion. The disengaged workers were unable to secure another job within four months of being disengaged. The RSA holders are, however, those under 50 years.
A breakdown of the report showed that the private sector accounted for 173,578 of the disengaged RSA holders, representing 95.43 per cent of the total number. The public sector on the other hand, accounted for 8,305 disengaged RSA holders, representing 4.57 per cent in the period under review.
The Pension Reform Act (PRA) 2014, Section 16, sub section (1) states that an employee shall not be entitled to make any withdrawal from his RSA account before attaining the age of 50 years.
However, Sub Section (5) further states that without prejudice to subsection 1, any employee, who disengages or is disengaged from employment before the age of 50 years and is unable to secure another employment within four months of such disengagement may make withdrawal from his RSA in accordance with the provisions of Sections 7 (2) and 7 (3) of the Bill.
Section 7 (2) states that where an employee voluntarily retires, disengages or is disengaged from employment, he or she may with the approval of the Commission, withdraw an amount of money not exceeding 25 per cent of the total amount credited to his RSA, provided that such withdrawals shall only be made after 4 months of such retirement or cessation of employment and the employee does not secure another employment.