At least 100,000 workers in the country have retired under the new pension scheme, known as, Contributory Pension Scheme (CPS).
In a recent report of the National Pension Commission (PenCom), it showed that of this number, about 90.41 per cent of the retirees opted for Programmed Withdrawal method of collecting periodic pensions including those who retired on health grounds, while about 9.59 per cent went for Annuity.
Programmed Withdrawal refers to withdrawals of funds on a regular basis, which may be monthly, quarterly, among others. As an RSA holder, upon attaining statutory retirement age of 60 or age 50 and opts to retire, whichever way, the person can request for the balance in his Retirement Savings Account (RSA) to be paid out to him through programmed withdrawals.
One can also withdraw money from his Voluntary Contributions (VC) via programmed withdrawals. The withdrawals will, however, be subjected to Personal Income tax where it is made before the end of five years from the date the voluntary contribution was made.
An annuity is a series of fixed payments paid at regular intervals over the specified period of the annuity.
Meanwhile, the commission said a total number of registered participants in the CPS is about seven million employees.
The report stated that the public sector accounts for a proportional contribution of about 48.69 per cent, while the private sector accounted for more than 51.31 per cent.
According to the report, “The CPS has simplified the process of payment of retirement benefits through the issuance and implementation of effective regulations and guidelines.
“The regulation requires employees to commence the process of accessing their benefits six months before the date of their retirement. This allows for smooth transition into retirement life as retirement benefits are currently paid as and when due.”