The revised regulation on the administration of retirement and terminal benefits by the National Pension Commission (PENCOM) has allowed low income earners to withdraw total retirement savings.
According PENCOM, low-earning pensioners are now permitted to withdraw their total retirement savings en bloc or continue to receive their monthly pension pending the approval of the Minimum Pension Guarantee. The decision was in line with the new minimum wage of N70,000.
Before this announcement, retirees are allowed to withdraw only one-third of their total RSAs.
In a circular addressed to pension fund administrators and custodians, PENCOM stated thus:
“The commission has noted that President Bola Tinubu had on Monday, 29 July 2024, signed the National Minimum Wage Bill into law.
“Accordingly, the new National Minimum Wage Act increased the National Minimum Wage from N30,000.00 to N70,000.00.
“Section 4.1 (g) of the Revised Regulation on the Administration of the Retirement and Terminal Benefits (the Regulation) provides that where the Retirement Savings Account balance cannot provide a monthly/quarterly pension or annuity of at least one-third of the prevailing minimum wage, the retiree shall be allowed to take the entire balance in the RSA en bloc.
“Consequent to the above, Pension Fund Administrators are hereby directed as follows; To apply N70,000 being the current National Minimum Wage in processing of retirement benefits in line with the provisions of Section 4.1 (g) of the Regulation.
“Retirees whose monthly/quarterly pensions are less than N23,333.33, representing one-third of the current minimum wage of N70,000.00, be allowed to choose between receiving the outstanding balance in their RSAs en bloc or continuing to receive their current monthly/quarterly pensions pending the commencement of the Minimum Pension Guarantee.”
Source: PENCOM permits low income earners to withdraw total retirement savings – StocksWatch
