Employers remit N692bn pension contribution – PenCom

Employers in the public and private sectors have remitted about NN692bn to the retirement savings accounts of their employees in the first half of the year.

This was disclosed in the latest quarterly report from the National Pension Commission.

An analysis of the data showed that in the first quarter, the pension contributions stood at N314.17bn and rose to N377.83bn in the three months ending June 2024, bringing the total for the first half to N692bn.

In the period under review, the public sector had the highest contribution of N380.28bn compared to N311.72bn from the private sector.

A year-on-year comparison showed that the pension contributions in H1 2024 dipped by 7.29 per cent from N746.45bn in the corresponding period of last year.

At the end of June, the total pension contribution since inception had risen to N10.63tn compared to N9.37tn at the end of the same period in 2023.

The total pension remittances for 2023 stood at N1.32tn.

Recently, the National Bureau of Statistics in its Nigeria Labour Force Survey annual report for 2023 revealed that Nigeria had a labour force of 88.94 million persons out of a total working-age population of 116.60 million.

Of the 88.94 million labour force in 2023, 27 per cent had no formal education, which may limit job opportunities and skills development.

The unemployment rate was highest in Abia State (18.7 per cent) and lowest in Nasarawa (0.5 per cent) while employees entitled to either pension or health insurance schemes were 26.3 per cent in Nigeria.

Meanwhile, there have been no changes in the status of the implementation of the Contributory Pension Scheme and other pension arrangements by States within the period under review.

The number of states (including the Federal Capital Territory) with laws on the CPS remained 25, with six states at the bill stage.

Also, six states have adopted the Contributory Defined Benefit Scheme.

Two out of the six, i.e., Jigawa and Kano, are currently implementing the scheme; Kano has yet to transfer pension assets to a pension fund custodian.

Gombe, Katsina, Zamfara and Adamawa were yet to commence implementation of the CDBS.

The Pension Fund Operators Association of Nigeria, in a piece on the contributions of the private and public sectors to the pension scheme, asserted that the public sector had generally led in pension contributions over the years, but the private sector had been catching up steadily, especially since Q2 2021, where it matched and exceeded public sector contributions.

“This growth suggests improved compliance, increasing employer participation, and growing awareness of pension obligations in both sectors. However, if more states were to join the Contributory Pension Scheme, these numbers could improve even further.

“Increased participation from states would lead to greater compliance, a broader base of contributors, and ultimately, a more robust pension system that could drive higher remittances and financial security for retirees across the country,” PenOp said on its Instagram page on Thursday.

The report also showed that younger Nigerians were signing up for retirement savings accounts.

In Q2, the new registrations by age and gender indicated that out of the 100,063 registrations, 83.05 per cent were active contributors below the age of 40 years.

Out of that number, 12,838 or 12.83 per cent of the new registrations were between the ages of 40 and 49.

The regulator affirmed that the data pointed to the “increasing sustainability of the CPS, as the younger generation is actively being enlisted into the scheme”.

“On the gender distribution, 40,317 or about 40.29 per cent of those that registered during the quarter were males, while the female counterparts recorded 59,746 or 59.71 per cent, thus sustaining dominance over the female gender in terms of registration into the scheme,” it stated.

It was a similar trend in the first quarter of the year when new registrations analysed by age and gender indicated that out of the 89,061 registrations, 83.60 per cent or 74,453 were active contributors below the age of 40 years.

Out of that number, 10,997 or 12.3 per cent of the new registrations were between the age of 40 and 49.

At the end of August, the pension funds industry portfolio stood at N21.13tn, which was about 1.66 per cent higher than N20.79tn in July.

The total RSA registrations since inception stood at 10,457,073.