Low-income pensioners now have the option to withdraw their entire retirement savings at once or continue receiving monthly pensions, pending the approval of the Minimum Pension Guarantee. This significant update comes from the National Pension Commission (PENCOM), as outlined in a memo signed by A.M. Salem, Head of the Surveillance Department.
The memo, dated November 27, 2024, and obtained by our correspondent in Abuja, highlights changes following the revised Section 4.1 (g) of the regulation on the administration of retirement and terminal benefits. This adjustment aligns with the recent increase in the national minimum wage to N70,000.
Previously, retirees were limited to withdrawing only one-third of their total Retirement Savings Accounts (RSAs). However, the new regulation allows those whose RSA balances cannot provide a monthly or quarterly pension of at least one-third of the minimum wage to withdraw their entire savings en bloc.
PENCOM’s directive to pension fund administrators and custodians states: “The commission has noted that President Bola Tinubu signed the National Minimum Wage Bill into law on July 29, 2024, raising the minimum wage from N30,000 to N70,000.
“Accordingly, Pension Fund Administrators should apply the new minimum wage when processing retirement benefits in line with Section 4.1 (g). Retirees with pensions less than N23,333.33, which is one-third of the current minimum wage, can choose to withdraw their remaining RSA balance in full or continue with their existing pension payments until the Minimum Pension Guarantee is implemented.”
To process the withdrawal of the full RSA balance, retirees must submit the following documents to the commission for approval:
– A consent form confirming that the retiree was adequately informed about the Minimum Pension Guarantee and opted to withdraw the full balance.
– A hard copy application letter, with a handwritten signature, requesting the withdrawal.
– A payment schedule template, provided as Appendix 1.
PENCOM emphasizes that all necessary measures should be taken to ensure full compliance with this directive, which takes immediate effect.
