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Economic hardship: Massive contingency withdrawals hit micro pension funds
At the backdrop of heightened economic hardship subscribers to the micro-pension scheme have began to draw down on their contributions through contingency withdrawals.
The micro-pension plan, MPP, was created by the National Pension Commission to encourage low income group, mainly self employed and informal sector workers, to have a pension savings for their old age.
Financial Vanguard findings from pension data show that the contingent withdrawals by micro pension contributors in 2023 skyrocketed by 245.2 per cent to N21.4 million from N6.2 million recorded in 2022.
Also, the number of contributors that made contingent withdrawals increased by 68.4 per cent to 64 in 2023 from 38 recorded in 2022.
Contingent withdrawals is that portion of the Retirement Savings Account, RSA, balance made available for withdrawal to ease financial pressures or needs of the micro pension contributor before his/her retirement.
The sharp rise in contingency withdrawals is coming at the backdrop of underperformance being recorded in the low income pension category, with the target enrollments completely off plan.
The scheme, one of the most strategic financial inclusion measures of the Federal Government packaged and implemented by the National Pension Commission, PenCom, had envisaged to enroll about nine million registrants by 2023, however only 114,382 contributors were registered as at end of 2023.
The data also show that total pension contributions to the micro pension stood at N680.2 million as at December 2023.
Consequently, as the economic hardship continues to bite harder, some micro pension contributors are taking advantage of the contingent withdrawal option of the plan to withdraw from their pension savings.
Meanwhile, quarterly breakdown of the withdrawals in 2023 show that micro pension contributors withdrew N2.98 million in Q1’23.
The figure went up by 3.7 per cent to N3.09 million in Q2’23 and in Q3’23, the figure further increased by 238.5 per cent to N10.46 million, but dropped in Q4’23 to N4.87 million, a 53.4 per cent decline.
Experts’ insight
Speaking on the development, Executive Director of the Center for Pension Rights Advocacy, Mr. Ivor Takor, stated that the rise in the withdrawals of pension savings could continue except government fixes the economy for the better.
He said: “The contingency plan is just part of encouragement for the contributors to know that if they are passing through any challenge, they can withdraw from the contingency plan.
“And the economy, like all of us know, is so bad, so the contributors cannot have that money standing there and they are dying of hunger or sickness.
“What the government can do is to fix the economy and do things well so that people will begin to have a meaningful life because even those of us who are working you cannot be having challenges and you have money in your savings account and you will not go for it. It is expected anyway, and the trend could continue. It can only improve and get better when the situation and welfare of citizens is better.”
Also speaking, Managing Director of Achor Actuarial Services, Mr. Pius Apere stated that the MPP is designed to bring the self employed members of the public into the pension system with a view to safeguarding them from retirement age poverty.
Apere said: “The government must do all within its power to turn the economy around for the better to prevent further withdrawals from pension savings. An average Nigerian must have one form of pension scheme or the order; formal or informal and the micro pension plan can help us to include more Nigerians in the financial safety net. Micro pension can be made a big deal in Nigeria”.
According to the Director-General, PenCom, Mrs. Aisha Dahir-Umar, “The implementation of the micro pension plan will improve the standard of living of the informal sector participants at retirement and reduce dependence on extended family for support at retirement.”
She noted that the self-employed people and workers in the informal sector could reap financial and economic protection by participating in the plan, as the initiative will provide income at old age and inculcate a savings culture through highly protected and regulated investment.
The First Lady, Mrs Oluremi Tinubu, on Saturday, refuted reports that she will be leading a seven-day national prayer for Nigeria.
This followed a report last week that Mrs Tinubu and the National Security Adviser, Mrs Nuhu Ribadu, will spearhead a national prayer session to tackle the country’s numerous challenges.
The reports quoted the Director-General of the National Prayer Forum, Segun Afolorunikan, announcing the event in Abuja.
Afolorunikan had said the initiative, coordinated with Christian and Muslim religious leaders, intends to seek divine intervention for the country’s socio-economic and security issues, under the theme ‘Seeking the Intervention of God in Nigeria’s Affairs.’
“Christians will meet at the National Ecumenical Centre for a week of intense prayer, with prayer warriors from various denominations focusing their efforts on the nation’s adversities,” said the convener.
However, the First Lady has denied knowing any such arrangement saying a call for prayer must be done “willingly, conscientiously and correctly.”
Mrs Tinubu’s Senior Special Assistant on Media, Mrs Busola Kukoyi, conveyed this in a statement she signed Saturday titled ‘First Lady of Nigeria Oluremi Tinubu, CON refutes organising national prayer.’
It read, “This is to clarify and inform the general public that the First Lady of Nigeria is not organising a national prayer.
“The news making rounds in some conventional and social media platforms is unfounded and misleading.
“Consequently, anyone who might have come across the purported news of the joint National Prayer for Nigeria should disregard it as false.”
Kukoyi said the First Lady, a Christian and strong advocate of prayer and praying for Nigeria, believes that prayer is an act that must be done willingly, conscientiously and correctly.
“She also believes that praying for Nigeria is the responsibility of every Nigerian, irrespective of religious belief, political affiliation, tribe or tongue.
“Members of the public are advised to verify the authenticity of any news or event involving the First Lady of Nigeria or her office through official channels,” the statement concluded.
A building of 25 shops has been gutted by fire in the early hours of Saturday in Ilorin, the Kwara state capital.
According to the state fire service, the incident occurred at Adeta roundabout at about 02.39 hours.
A statement in Ilorin on Saturday by the spokesman of the service, Hassan Adekunle, said the firefighters, upon arrival, found a block of about 25 shops engulfed in flames.
“Thanks to the swift action and bravery of the Kwara State fire service officers, only three shops suffered damage, including a soft drinks and alcohol shop.
“Preliminary investigations indicated that the fire was caused by a power surge,” the statement disclosed.
The Director of the State Fire Service, Prince John Falade Olumuyiwa, expressed sympathy for the affected shop owners, offering prayers for the restoration of their losses.
He also urged the public to prioritize safety and ensure all electrical appliances are unplugged when not in use.
The newly emerged terror group known as Lakurawa, is reportedly offering as much as one million naira to young men in exchange for their allegiance.
This was made known on Saturday by Zagazola Makama, a Lake Chad Basin counterterrorism and insurgency expert, in a post on his X handle.
Makama disclosed that an impeccable source informed him that Lakurawa, allegedly composed of individuals from Mali, Chad, Libya, Niger, and Burkina Faso, was actively recruiting local youths in Sokoto through substantial financial incentives.
He stated that according to witnesses’ accounts, the financial lure is part of an aggressive recruitment campaign aimed at attracting followers to their cause.
The security expert said that Lakurawa, unlike traditional criminal gangs, reportedly adhere to extremist ideologies linked to the Khawarij sect, similar to the beliefs of Boko Haram.
Makama added: “Local sources suggest that they employ a combination of financial incentives and ideological influence to gain support among vulnerable communities.
“Beyond the recruitment, the Lakurawa reportedly confront and expel bandits and confiscate their cattle in areas under their control.
Watch video below:
https://twitter.com/ZagazOlaMakama/status/1855319733282758848?ref_src=twsrc%5Etfw
First Lady denies leading national prayer
25 Shops destroyed as fire guts building in Ilorin
New terror group Lakurawa offers N1m incentives to recruit Sokoto youths + Video
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