PenCom: 3.5m unfunded pension accounts belong to civil servants, private employees

The National Pension Commission says 3.5 million pension accounts have remained unfunded as of the end of December 2020.

This is contained in the 2020 fourth-quarter report released by the commission.

An unfunded pension account will result in a lack of access to funds for retirees at old age.

PenCom said a majority of the unfunded accounts belong to civil servants under state governments and some workers in private sector organizations.

It noted that the total workers under the contributory pension scheme stood at 9.2 million as of December.

According to the commission, a review of pension accounts showed that 5.1 million retirement savings account (RSA) had incomplete documentation.

“A review of the monthly reports of the pension operators revealed that 5.1 million RSAs had incomplete documentation as of Q4 2020. Nonetheless, the engagement of agents to conduct data recapture on behalf of all the PFAs is expected to address this issue and validate all relevant documents under the profile of individual RSA holders,” the report reads.

“Another notable outcome of the review of the monthly reports was the un-credited pension contributions domiciled in the contribution reconciliation accounts (CRAs) and the transitional contributory funds (TCFs) of the pension operators. The commission, however, mandated the pension operators to ensure resolution of all outstanding un-credited contributions and file progress reports at regular intervals.

“Similarly, the monthly reports indicated that a total of 3.5 million RSAs had remained unfunded as at the end of Q4 2020. A majority of these unfunded accounts belong to employees of state governments and private sector organisations.”