A bill proposing retirees can make a 75% withdrawal from their Retirement Savings Account (RSA) after retirement has passed second reading at the Senate.
The bill titled: “The Pension Reform Act 2014 Amendment Bill 2022” scaled second reading during Wednesday’s plenary following debates on the general principles of the bill.
The bill, sponsored by Senator Aliyu Wamako, proposes a 75% withdrawal of RSA after retirement from service. Leading the debate, the lawmaker said retirees live in misery and pain due to lack of access to their benefits after retirement leading to diseases and sometimes even death.
What the bill proposes
The bill titled “The Pension Reform Act 2014 Amendment Bill 2022” proposes a definite and reasonable percentage a retiree can withdraw from RSA after retirement.
Senator Wamako said the bill addresses the issue of delay faced by retirees in withdrawing savings from retirement savings accounts.
While lamenting the suffering of pensioners, he said, “None of us can claim ignorance of the long-drawn-out anguish of retirees from the Civil Service, Nigerian Prison Service, universities and other federal agencies in the country.
“These retirees rather than enjoy retirement after selflessly serving their fatherland, have continued to live in misery and pain, leading to diseases and even death, as they cannot easily access their benefits.
“There is the existence of a Pension Reform Act 2004, which is now amended as Pension Reform Act 2014.
“The Act provides for a departure from the old pension scheme of ‘Defined Benefits’, to the new Contributory Pension Scheme (CPS). It also provides for the set-up of the National Pension Commission (Pen Com).”
“These Nigerians who have retired from service after several years serving the nation are finding it extremely difficult to be the owners of their pension savings in this new arrangement.
“So, unless that law is made categorically clear that they can withdraw the 75 per cent, which we are proposing in this amendment, then they can definitely have some relief as retirees.”
The lawmaker noted that PenCom has over N12.78 trillion accumulated of which retirees still do not benefit from.
“But the true situation is that only the Pension Administrators are benefitting, while the owners continue to suffer total neglect,” the lawmaker said.
Senator Yahaya Abdullahi, while contributing to the debate, said a fundamental reform is needed to enable pensioners to receive a lump sum from their savings account. He also proposed including a means of coercing states to pay pension arrears.
He said, “This monthly allowance should be reviewed so that the sufferings of retirees in the federal level can be addressed.”
“The area the sponsor did not touch is the area of the states. That is where the bulk of the pensioners live and their life has been devastated. Some of them are dead, some of them are completely neglected.
“I recognise that the Act operates only at the national level for Federal Government staff. Is there no way we can be able to induce in this legislation some means of forcing the states to pay pension arrears and to also make sure that retiring staff who died in the service of the state are allowed pension allowances that will amount to a living wage.”
Ahmed Lawan, the Senate President referred the bill to the Senate Committee on Establishment and Public Service Matters for further legislative action.
The committee is directed to report back to the house within four weeks.
What you should know
- On November 5, 2019, the bill was brought before the Senate and read to the house.
- The bill seeks to bring support in time of hardship to retirees by allowing them withdraw up to 75 percent of their pension funds.
This, if passed can go a long way in easing problems of unemployment by attracting so many Nigerian employees to retire, thereby paving way for teaming unemployed graduates to be employed.