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Abuja – December 3, 2024
In a serious coverage shift, the Nationwide Pension Fee (PENCOM) has introduced that low-income pensioners now have the choice to withdraw their whole Retirement Financial savings Account (RSA) balances or proceed receiving month-to-month pensions. This comes because the Minimal Pension Assure (MPG) awaits implementation.
The directive, detailed in a memo dated November 27, 2024, and signed by A.M. Salem, Head of PENCOM’s Surveillance Division, aligns with latest amendments to Part 4.1 (g) of the laws governing retirement advantages.
Impression of Minimal Wage Enhance
The adjustment follows the nationwide minimal wage improve to ₦70,000, signed into regulation by President Bola Tinubu on July 29, 2024. Beforehand, retirees might solely entry one-third of their RSA balances, however the revised regulation permits full withdrawals for pensioners whose financial savings can not present month-to-month or quarterly pensions of no less than one-third of the brand new minimal wage.
Key Provisions
Pensioners with month-to-month pensions under ₦23,333.33—equal to one-third of the minimal wage—are eligible to withdraw their full RSA balances. Additionally they retain the choice to proceed receiving pensions below the present scheme till the MPG is applied.
PENCOM’s directive to Pension Fund Directors (PFAs) states:“PFAs ought to apply the brand new minimal wage when processing retirement advantages. Retirees whose pensions fall under the edge can both withdraw their remaining RSA balances in full or proceed with their present pension funds.”
Withdrawal Necessities
Retirees choosing full withdrawal should submit the next paperwork to PENCOM:
Consent Type: Signed affirmation indicating the retiree understands the MPG possibility and has opted for full withdrawal.
Utility Letter: A handwritten, signed request for the withdrawal.
Cost Schedule Template: As laid out in Appendix 1 of the directive.
Rapid Impact
The directive, which takes impact instantly, mandates Pension Fund Directors and custodians to make sure strict compliance.
Implications for Pensioners
This improvement supplies reduction for low-income retirees, providing flexibility and rapid entry to funds. Nonetheless, the MPG’s pending implementation leaves questions on long-term monetary safety for pensioners with out substantial financial savings.
As stakeholders modify to the brand new directive, PENCOM’s coverage underscores its dedication to aligning retirement advantages with the financial realities of Nigeria’s evolving minimal wage construction.
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