✕ CLOSE Online Special City News Entrepreneurship Environment Factcheck Everything Woman Home Front Islamic Forum Life Xtra Property Travel & Leisure Viewpoint Vox Pop Women In Business Art and Ideas Bookshelf Labour Law Letters
Click Here To Listen To Trust Radio Live

How pensioners spend retirement benefits

In Nigeria, there seems to be more emphasis on where and how pension benefits of retirees come from than where such benefits go to. Retirement…

In Nigeria, there seems to be more emphasis on where and how pension benefits of retirees come from than where such benefits go to.
Retirement may no longer mean tiredness going by the increasing number of workers around the world, including Nigeria who no longer collect their pension benefits and end up in obscurity.
The involvement of pensioners in post-retirement economic activities have given rise to the concept of ‘Third Age Economy.’
There is no available data in Nigeria on the number of retirees who continue to work after retirement or even how their pension entitlements are spent but in the United Kingdom the Office for National Statistics (ONS) estimates that around 1.4 million people now continue to work beyond 65.
Both under the Defined Benefits Scheme (DBS) and the Contributory Pension Scheme (CPS), retirees, who had put in specified number of years in service are entitled to lump payments in addition to programmed monthly pension payments.
PenCom guidelines indicate that where an employee disengages or retires from active service upon or after, attaining the age of 50 years old and the Retirement Savings Account (RSA) balance is less than N550,000, the employee would be paid the total balance in his or her RSA in a single payment also known as en-bloc payment.
However, if the RSA balance is above N550,000, the employee  receives a lump sum payment  of the amount payable after sufficient provision have been made to procure a programmed withdrawal or an annuity that will produce an amount that should not be less than 50 per cent of his/her annual salary as at the date of retirement.
For workers who retired under the DBS, they also receive lump payments as determined by the respective arms of government.
Daily Trust sets out to find out how retirees spent thier pension entitlements, which is usually up to 25 per cent of thier total pension savings.
A retired civil servant, Abdulkadir Usman, revealed that he invested his benefits in procuring a house in Kaduna after he retired from active service.
Usman, who retired in 2006, said he had hoped that his monthly pension payments would sustain him afterwards.
“I was working and living in Kaduna with my family in a rent ed place. The only house my family had was in my village. When I got the money, I bought a house in Kaduna because we didn’t want to return to my village,” he explained.
He justified the action further, “the house has appreciated in value and my family is still living there.”
Usman, who now works with a non-governmental organisation in Abuja, expressed regret for the action, saying if he had better financial advice he would have invested the money in a trade.
Another pensioner, Mr. Samuel Echetalu,  said he spent his lump sum payment on “family problems.”
When asked to give details on the problems, he said, “family problems are very many, my son,”
Echetalu now runs a provision store with his wife at Apo axis of the Federal Capital Territory, Abuja.
He told Daily Trust that his son funded the business after he had spent some years doing nothing after retirement.
Echetalu’s involvement in petty business after retirement lends credence to  Malcolm Forbes’ popular quote that “retirement kills more people than hard work ever did.”

VERIFIED: It is now possible to live in Nigeria and earn salary in US Dollars with premium domains, you can earn as much as $12,000 (₦18 Million).
Click here to start.