Low-Income Retirees Allowed to Withdraw Full Retirement Savings, Says PENCOM

Low-Income Retirees Allowed to Withdraw Full Retirement Savings, Says PENCOM

By Fly Cable News

Low-income pensioners now have the option to withdraw their entire retirement savings or continue receiving their monthly pension, pending the approval of the Minimum Pension Guarantee. This was announced in a memo by the National Pension Commission (PENCOM), signed by A.M. Salem, the Head of the Surveillance Department.

The memo, dated November 27, 2024, follows the revised section 4.1(g) of the regulation on retirement and terminal benefits, which aligns with the newly increased minimum wage of N70,000. Prior to this, retirees were only allowed to withdraw one-third of their total Retirement Savings Accounts (RSAs).

PENCOM’s memo notes that following the signing of the National Minimum Wage Bill into law by President Bola Tinubu on July 29, 2024, the new minimum wage increased from N30,000 to N70,000. Under the new regulation, retirees whose monthly or quarterly pensions fall below N23,333.33—one-third of the new minimum wage—can now choose to either withdraw their entire RSA balance or continue receiving their pension until the Minimum Pension Guarantee is in place.

Pension Fund Administrators (PFAs) are directed to apply the N70,000 minimum wage when processing retirement benefits. Retirees wishing to access their full RSA balance must submit a consent form, a signed hard copy of their withdrawal application, and other necessary documents for approval. The new policy is effective immediately.