Twelve years after the Contributory Pension Scheme kicked off in the country, about 162,025 retirees are earning their monthly benefits from pension and insurance operators.
The CPS was introduced following the enactment of the Pension Reform Act in 2004 to introduce a new platform for employees of the public and private sectors to be able to save during their working years and have financial security when they retire.
Currently, the scheme has produced 162,025 retirees who are earning regular monthly income from operators of the scheme.
The CPS mandates employers to contribute 12 per cent and deduct eight per cent of the employers’ monthly emolument, which are to be regularly remitted into the workers’ Retirement Savings Account with their respective Pension Fund Administrators.
The worker could have access to the fund at retirement or at the age of 50. However, the law allows the contributor to deduct part of the contribution under some specific conditions.
Upon retirement, the worker accesses the pension either as programmed withdrawal, which is managed by the Pension Fund Administrators or annuity by the life insurance companies.
According to the Act, programmed withdrawal is an option that is calculated on an expected life span, which means that the pensioner will be paid on a regular basis for a fixed number of years, after which he ceases to earn any further income from his PFA again.
The Act specifies that the annuity will be paid on a regular basis by the insurance company to the pensioner until he dies, no matter how long he lives.
Figures from PenCom showed that as of the end of March this year, 132,405 retirees were earning their pensions through programmed withdrawal and had collected lump sums worth N329.384bn.
The programmed withdrawal retirees were also collecting monthly pensions worth N4.3bn from their respective PFAs…. Read more
Culled from Punch