The total lump-sum payments to pensioners under life annuity hit N1.1 trillion in the second quarter of 2024, representing a significant milestone in Nigeria’s pension industry.
This was revealed by the Chief Executive Officer (CEO) of the Pension Fund Operators Association of Nigeria (PenOp), Mr. Oguche Agudah, during the annual conference of the Pension Correspondents Association of Nigeria (PENCAN) in Abuja.
A total of 129,435 pensioners benefited from the life annuity disbursements, which offer retirees a guaranteed income stream for life in exchange for a lump sum payment or series of payments. Life annuities are crucial for retirement planning, providing predictable income and reducing the risk of retirees outliving their assets.
The N1.1 trillion disbursed in Q2 2024 reflects a steady increase compared to N798.14 billion paid to 102,696 applicants in Q3 2022 and N485.16 billion disbursed to 71,214 pensioners in Q3 2019. This trend stresses the consistent growth in pension payouts, a direct result of the 20 years of pension reforms that have transformed Nigeria’s retirement savings landscape.
Mr. Agudah commended the growth of the industry and highlighted PENCAN’s role as a key partner in driving the expansion of pension benefits. “We need more enlightenment, and our doors are always open for collaboration,” he said.
The pension industry also witnessed a substantial rise in client registrations under the Retirement Savings Account (RSA) scheme.
The number of registered RSAs surged from 254,178 in Q3 2007 to over 10.28 million in Q3 2024, marking a significant expansion of the pension system.
Mr. Agudah credited the rise in RSA registrations to reforms in the pension sector, which have broadened access to pension funds, ensuring more Nigerians benefit from retirement savings.
Additionally, programmed withdrawals—a method by which pensioners access their retirement funds—continued to rise. In Q2 2024, N1.12 trillion was paid to 357,310 applicants, compared to N887.60 billion disbursed to 315,112 retirees in Q3 2022. This increase reflects the growing demand for pension benefits as more retirees begin to access their entitlements.
Withdrawals of 25 percent of RSA balances due to job losses also saw an upward trend, with N247.47 billion disbursed to 483,644 RSA holders in Q2 2024, up from N182.2 billion paid to 443,720 RSA holders in Q3 2022. The increase in job-loss-related withdrawals highlights the ongoing economic challenges faced by the workforce.
Death benefits paid to the families of deceased employees also surged. In Q2 2024, N451.2 billion was disbursed to 104,259 families, up from N310.43 billion paid to 83,533 families in Q3 2022. This rise highlights the expanding coverage and impact of the pension system in providing essential financial support to beneficiaries of deceased contributors.
The role of the pension industry in the housing sector also grew, with 5,276 mortgage applications approved in Q2 2024, compared to just 746 in Q3 2023. Payments for these mortgages amounted to N47.13 billion in Q2 2024, a substantial increase from N18.98 billion in Q3 2023.
As of July 2024, the total assets under management in Nigeria’s pension industry reached N20.87 trillion, up from N14.42 trillion in Q3 2022. This growth reflects the increasing financial health of the pension system, which continues to provide a reliable source of income for retirees.
Speaking at the event, the Executive Secretary of the Pension Transitional Arrangement Directorate (PTAD), Mrs. Chioma Ejikeme, represented by PTAD’s Head of Communication, Mr. Olugbenga Ajayi, stressed the importance of advocacy in supporting pensioners. She commended PENCAN for fostering widespread awareness and reiterated PTAD’s commitment to ensuring pensioners receive their payments.
“So far, working with PENCAN, advocacy has been fostered with widespread undiluted information. PTAD has been at the forefront of enabling an environment for the welfare of pensioners,” Mr. Ejikeme said.
The pension industry’s steady expansion, driven by reforms and collaborations, continues to provide financial security to a growing number of retirees across Nigeria. The increasing pension payouts, rise in RSA registrations, and growth in assets underscore the industry’s crucial role in supporting the welfare of both pensioners and their families.
