PENCOM Releases Guidelines For Pension Funds Withdrawal

In line with the provisions of the Pension Act of 2014, PenCom has released
guidelines for the withdrawal of pension funds. This new development will enable
Retirement Services Account (RSA) holders to make use of their pension fund balances
to make acquisitions of their primary homes.

In a statement made available to us by Chinelo Anohu-Amazu, the Director General of National Pension Commission, She said; the change was made to allow for “funds to be accessed in a manner that is safe”. Currently, Nigeria’s contributory pension system is a function of the employee’s salary- 10 per cent paid by the employer and eight per cent paid by the employee.

Anohu-Amazu who met President Muhammadu Buhari recently said they extensively spoke on the pension industry as a whole and highlighting the achievements as well as bringing to the fore the challenges.

One of the primary issues surrounding pensions in Nigeria is the payment of the accrued rights, which are pensioners who have already retired with a hybrid of this contributory pension system and accrued rights from their previous careers and the federal government, she said “As is typical of Mr president, as soon as the challenges were explained to him, he ordered both the minister of finance and the Central Bank of Nigeria to make sure the complete off-setting of the pension liabilities under the CPS [contributory
pension scheme] is supervised so retirees don’t have to wait forever to get their
pension”.

Further, the ministry also asked for the president’s participation in the World Pension Summit, specifically with the World Pension’s Reward which will look into African countries’ innovation, corporate governance and their administering of African benefits.The beauty of the contributory pension system, you don’t have to run after anyone to pay your dues, you receive quarterly statements as soon as you retire, your money is paid immediately.” Amazu Anohu said.

She made a distinguish comparison between the old system of accrued rights and the current one, those contributions are “safe and intact” and they are just waiting for the accrued rights to come in so that the computation can be done on a global basis. “Those who have retired on the contributory system don’t have that problem.”