Operators paid N74.08bn retirement benefits in Q2 –PenCom

By Chiamaka Ajeamo                                   thesuninsurancenews@gmail.com   

The Pension Fund Administrators (PFAs) paid N74.08 billion retirement benefits to pensioners under the Contributory Pension Scheme (CPS) in the second quarter of 2021.

The National Pension Commission (PenCom) disclosed this in its second-quarter 2021 reports.

“A total of N74.08 billion was paid as retirement benefits in Q2 2021. This was higher than the retirement benefits of N67.41 billion paid in Q1 2021 by a difference of N6.68 billion , representing 89 per cent,” the report stated.

Further analysis of the data revealed that retirees under the programmed withdrawal received a total lump sum of N13,059.79 million while their total monthly pension amounted to N209.05 million. These retirees comprise 1,406 public workers at the federal and states levels and 3,032 from the private sector.

On retirement benefits through life annuity, the Commission granted approval to one thousand seven hundred and eight (1,708) contributors under the retiree life annuity for the quarter. A total lump sum of N4,586.16 million was approved for payment to the retirees, while the sum of N12,346.89 million was approved for payment to 14 retiree life annuity providers as premium in return for total monthly/quarterly annuities of N122.46 million.

The report also showed that approvals were granted for payment of death benefits amounting to N6,175.13 million to the legal beneficiaries/administrator of 1,209 deceased employees and retirees. This comprised 835 public sector workers; both from the federal and state and 374 private sector employees/retirees.

According to the report, for the quarter under review, the industry recorded a marginal growth of 0.89 per cent, that is, 83,146 in schemes membership rising from 9.36 million members at the end of Q1 2021 to 9.44 million as at Q2 2021.

The growth in the industry membership was driven solely by the Retirement Savings Account (RSA) scheme, which had an increase of 83,146 registered contributors. However, membership of the Closed Pension Fund Administrator (CPFA) scheme and Approved Existing scheme (AES) remained unchanged as at Q2 2021 with 14,926 and 40,951 members respectively.

“The cumulative RSA registrations grew from 9,300,058 recorded in Q1 2021 to 9,383,204 as at the end of Q2 2021, representing 0.89 per cent growth, mainly attributed to an increased level of compliance by the public and private sectors.”

The ranking of PFAs by the number of registered contributors as at the end of Q2 2021 showed an increase in the market share of the bottom three PFAs from 1.60 per cent in Q1 2021 to 4.5 per cent in Q2 2021.

Similarly, the bottom five PFAs recorded a slight increase in the number of registered RSAs from 4.2 per cent in Q1 2021 to 7.1 per cent in Q2 2021, while the bottom 10 PFAs recorded a marginal increase from 15.30 per cent in Q1 2021 to 18.2 per cent in Q2 2021.

PenCom noted that the market share of the top three remained unchanged at 37.30 per cent in Q2 2021, while the top five PFAs are maintaining their market share of 53.10 per cent as recorded in Q1 2021.

However, the market share of the top 10 PFAs marginally declined from 78.30 per cent in Q1 2021 to 75.1 per cent as at Q2 2021.

“A further breakdown of the cumulative PFA registrations revealed that 15 PFAs had registered less than 500,000 RSAs each while the remaining seven PFAs had registered more than 500,000 RSAs each as at the end of Q2 2021”, the report stated.

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