Low-income pensioners now have the option to withdraw their entire retirement savings at once or continue receiving regular pensions. This announcement comes as part of new measures introduced by the National Pension Commission (PENCOM) in line with updated regulations.
A memo signed by A.M. Salem, Head of the Surveillance Department at PENCOM, outlined the changes. Dated November 27, 2024, the document highlighted adjustments to pension administration rules following the recent increase in Nigeria’s minimum wage to ₦70,000.
Previously, retirees were restricted to accessing only one-third of their total Retirement Savings Account (RSA) balances. The new regulation under Section 4.1 (g) allows pensioners to withdraw the full balance if their savings cannot provide a monthly or quarterly pension of at least one-third of the current minimum wage, which is now ₦23,333.33.
The memo stated, “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 N70,000.00 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.”
The memo noted that the requests for payments to retirees who choose to receive the outstanding balance in their RSAs en bloc should be forwarded to the commission with the documents listed below for consideration and approval.
The documents include “A consent form reflecting that the PFA properly enlightened the retiree on the Minimum Pension Guarantee and that he/she chose to receive the outstanding balance in the RSA en bloc.
“A hard copy application letter (not an electronic signature) signed by the retiree to withdraw the outstanding balance in the RSA.
“The payment schedule in the template is attached as Appendix 1. You are therefore required to take all necessary measures to ensure full compliance with this circular. This circular takes immediate effect.”
