The National Pension Commission (PenCom) has approved the disbursement of N14.2 billion to 8,651 Nigerians who experienced temporary job loss in the first quarter of 2024.
The total sum disbursed reflects the considerable financial support provided to these individuals under the age of 50 years, averaging around N1.64 million per person.
This move is part of the measures to alleviate the financial challenges faced by individuals due to unemployment, providing much-needed relief amid ongoing economic difficulties.
Disbursement Breakdown
According to the First-Quarter 2024 Report of PenCom, a total of 8,702 Retirement Savings Account (RSA) holders requested to access 25% of their RSA balances due to temporary loss of employment.
Of these, 8,651 requests were approved, while 51 were rejected because the applicants were above 50 years of age.
The approved applicants comprised 8,167 individuals from the private sector and 484 from the public sector.
The PenCom report read: “A total of 8,702 RSA holders requested to access 25% of their RSA balances due to temporary loss of employment. Out of that, 8,651 RSA holders’ requests were approved, while fifty-one (51) were rejected because their ages were above 50 years.
“Out of the 8,651 applicants whose benefits were approved, 8,167 were from the private sector, while the remaining 484 were from the public sector. The sum of N14,203.04 million was approved for the 8,651 RSA holders under the age of 50 years.”
N238.19 billion transferred since inception
From inception to March 2024, a total of N238.19 billion has been approved for 501,807 requests. The total amount is an increase of 6.34% from N223.99 billion recorded in December 2023, indicating a growing reliance on pension funds as a financial safety net.
The total number of requests submitted since inception was 518,850, with 501,807 approved and 17,043 rejected.
This approval rate of approximately 97% shows PenCom’s role in providing critical financial assistance to a vast number of Nigerians during periods of unemployment.
The cumulative amount transferred illustrates the significant financial burden borne by the pension fund system and highlights the increasing economic pressures faced by individuals in the country.
Job loss dominant in the private sector
In Q1, the private sector remained predominant with 8,167 approvals, which is 94.4% of the total requests made in that period.
This trend affirms the higher prevalence of job loss in the private sector. Since the inception of the pension scheme, the private sector has accounted for a total of 478,241 approvals, reflecting the sector’s vulnerability to economic fluctuations.
The public sector, though less affected, still saw nearly 500 individuals seeking financial relief. Specifically, there were 269 requests from federal employees and 215 requests from state government employees in Q1 2024.
Since the scheme began, there have been 14,407 approvals from individuals employed by the federal government, while the state government sector has seen 9,159 approvals.
This data indicates that although job loss affects all sectors, the private sector employees are significantly more impacted.
In total, since inception, there have been 14,407 approvals from individuals employed by the federal government while the state government sector saw 9,159 approvals.
What you should know
According to Section 7(2) of the Pension Reform Act 2014, “Where an employee voluntarily retires, disengages or is disengaged from employment, as provided for under Section 16(2) and (5) of this Act, the employee may, with the approval of the National Pension Commission, withdraw an amount of money, not exceeding 25% of the total amount credited to his retirement savings account, provided that such withdrawals shall only be made after four months of such retirement or cessation of employment and the employee does not secure another employment.”
Nigeria’s economic landscape is fraught with challenges that are further exacerbated by job loss. The disbursement of pension funds provides temporary relief, but the underlying issues remain significant.
The country’s high unemployment rate, inflation, and volatile economic conditions contribute to financial instability for many Nigerians.
The private sector, in particular, has been hard-hit by these economic challenges. With a higher rate of job loss, individuals in this sector often find themselves in precarious financial situations.
The disbursement of pension funds, while helpful, highlights the need for more robust economic policies and job creation strategies.
