Retirees fund records 13% average returns in 9 years
Retirees Fund under the Contributory Pension Scheme (CPS), which are invested in approved asset classes within the limits stipulated in the National Pension Commission (PenCom) investment regulation has returned in the average 13 percent growth from 2009 to date.
Investment of retirees fund by Pension Fund Administrators (PFAs) is professionally done under the supervision of the PenCom.
According to the Commission, the balances in the retirees’ RSA together with the investment income represent the total money from which the retirement benefits are paid. This is either as programmed withdrawal by the Pension Fund Administrators or annuity by life insurance companies.
The Net Assets Value of RSA ‘Retiree’ Funds increased by N6.61 billion in the fourth quarter, 2017, increasing from N556.42 billion on 30 September, 2017, to N563.03 billion as at 31 December, 2017.
The Weighted Average Rate of Return (WARR) on the RSA ‘Retiree’ Funds in the fourth quarter, 2017 was 16.24 percent (annualized), an increase in performance when compared with the annualized WARR of 15.57 percent recorded in the previous quarter.
The marginal increase in the WARR between the third and fourth quarters, 2017 was a combination of the yields on fixed income securities, which constituted approximately 99 percent of the total portfolio and the increase in value of quoted stocks in the portfolios.
However, the total number of retirees currently receiving their pensions under the Programmed Withdrawal (PW) increased from 165,740 in the previous quarter to 174,512 in the fourth quarter, 2017. This represent 5.29 percent (8,772) increase from the total retirement recorded via the PW.
A sectoral breakdown of those that retired under the PW during the quarter shows that, the public sector had 68.91 percent (6,045) of total retirees while the private sector was 31.09 percent (2,727).
During the quarter under review, 8,772 retirees were paid the sum of N21.74 billion as lump sum and N0.28 billion as monthly programmed withdrawals. The breakdown of the above position is reflected in table 3.12 below:
Consequently, the Table further shows that from inception to date, a total of 174,512 retirees have been paid the sum of N448.90 billion as lump sum and N5.91 billion as monthly programmed withdrawals.
In the case of annuity, the Commission approved a total of 6,851 applications for annuity retirement plan during the further quarter of 2017, bringing the total number of retirees receiving their retirement benefits through the annuity plan to 48,539. The 6,851 retirees received N6.32 billion as lump sum payment and paid annuity premium of N35.77 billion to insurance companies cumulating to a total of N60.29 billion and N241.62 billion as lump sum payments and annuity premium respectively. The retirees were receiving average monthly annuity of N2.53 billion as at the end of December, 2017.
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