The National Pension Commission (PenCom) has announced a new policy allowing low-earning retirees to withdraw their entire Retirement Savings Account (RSA) balances or continue receiving monthly pensions, pending the implementation of the Minimum Pension Guarantee.
The directive, detailed in a memo dated November 27, 2024, was signed by A.M. Salem, Head of the Surveillance Department at PenCom, and addressed to pension fund administrators and custodians. It aligns with Nigeria’s new national minimum wage of ₦70,000, signed into law by President Bola Tinubu on July 29, 2024.
Key Changes for Pensioners
Under the revised regulation, retirees whose RSA balances cannot provide a monthly or quarterly pension of at least one-third of the new minimum wage—₦23,333.33—are eligible to withdraw their savings in full or opt to continue their current pension payments.
Previously, pensioners could only withdraw one-third of their total RSA savings, limiting access to their funds.
PenCom’s Memo Highlights
The memo outlined specific directives for implementing the changes:
- Application of New Minimum Wage: Pension Fund Administrators (PFAs) must use ₦70,000 as the minimum wage benchmark when processing retirement benefits.
- Eligibility for Full Withdrawal: Retirees earning less than ₦23,333.33 per month in pensions can opt to withdraw their entire RSA balance.
- Consent and Documentation: PFAs must ensure retirees are fully informed of their options under the Minimum Pension Guarantee. Retirees choosing a full withdrawal must provide a signed consent form, a handwritten application letter, and a payment schedule for processing.
The directive, which takes immediate effect, requires PFAs to comply fully with the new rules and forward requests to PenCom for approval.
