Relatives of deceased pension contributors get N82bn – PenCom

The National Pension Commission has disclosed that about N82.22bn was paid in death benefits to 10,451 relatives (next of kin) of deceased pension contributors in 2024.

This is according to the latest Pension Industry Information Dashboard.

The figure represents a 40.3 per cent increase from the N58.6bn paid in 2023, affirming the growing financial impact of the pension scheme in providing support for families of deceased contributors.

An analysis of the data shows that death benefits have consistently increased over the years.

In 2020, a total of N31.09bn was paid to 6,731 next of kin, while N42.83bn was disbursed in 2021 to 8,327 beneficiaries.

The figure rose to N59.6bn in 2022, covering 10,631 cases, before reaching N58.6bn in 2023 for 9,836 next of kin.

The latest increase in 2024 follows a rising trend in benefit payments, which suggests higher compliance with the Contributory Pension Scheme and growing awareness among contributors about ensuring their next of kin receive entitlements upon their demise.

In addition to death benefits, total pension payouts across various categories remained substantial in 2024.

The monthly programmed withdrawal scheme, which allows retirees to access funds at regular intervals saw a cumulative N114.5bn disbursed as of Q3 2024.

The retiree life annuity system, which ensures a steady income for pensioners, recorded N689.4bn in premium payments.

Meanwhile, lump-sum payments, which grant retirees a portion of their savings upon retirement, stood at N83.73bn, covering 19,481 retirees in 2024.

The number of retirees opting for lump sums has reduced compared to previous years, indicating a preference for structured withdrawals in line with long-term financial planning.

The pension industry continues to grow, with cumulative pension contributions reaching N10.97tn by the third quarter of 2024.

Public sector contributions accounted for N5.71tn (52.1 per cent), while private sector contributions stood at N5.25tn (47.9 per cent).

The industry also recorded a steady increase in Retirement Savings Account registrations, with 10.54m registered accounts as of Q3 2024.

The year saw 118,339 new RSA registrations, reflecting the growing adoption of the scheme and sustained efforts at pension inclusion.

The Micro Pension Plan, which was introduced in 2019 to cater to workers in the informal sector, also saw increased participation.

By Q3 2024, the total number of micro pension registrations stood at 164,031, with savings reaching N967.19m, an increase of N878.07m from 2020.

The figures highlight the growing recognition of pension security among informal sector workers, despite economic challenges.

The report also shows that payments under accrued rights, which cover pension entitlements for Federal Government employees who were part of the old pension scheme before the CPS was introduced in 2004, remained steady.

A total of N61.71bn was disbursed to 14,873 beneficiaries in 2024, ensuring continued financial support for retirees transitioning to the contributory scheme.

Meanwhile, the RSA transfer system, which allows contributors to switch pension fund administrators once a year, has recorded increased activity.

As at Q3 2024, a total of N1.26tn had been transferred since inception, with 67,146 RSA transfers recorded in 2024.

The figures suggest greater awareness and competition among pension administrators, as contributors seek better returns and service delivery.

Despite steady growth in pension assets and contributions, economic conditions and inflationary pressures continue to influence the pension industry.