Low-earning pensioners are now allowed to either withdraw their entire retirement savings in a lump sum or continue receiving their monthly pension, pending approval of the Minimum Pension Guarantee. This new policy is outlined in a memo from the National Pension Commission (PenCom), signed by A.M. Salem, Head of the Surveillance Department, dated November 27, 2024.
The memo follows an update to the regulations under Section 4.1(g) of the revised guidelines on the administration of retirement and terminal benefits, in response to the recent increase in the National Minimum Wage to N70,000. Previously, retirees were only allowed to withdraw one-third of their total Retirement Savings Accounts (RSAs).
The memo states that President Bola Tinubu signed the new National Minimum Wage Act into law on July 29, 2024, raising the minimum wage from N30,000 to N70,000. According to the new regulations, if a pensioner’s RSA balance is insufficient to provide a monthly or quarterly pension of at least one-third of the current minimum wage (N23,333.33), they are entitled to withdraw the full balance from their RSA.
Read also:
- Tinubu: Petrol Subsidy Removal and Exchange Rate Unification Essential to Save Nigeria
- Nigeria Commits to Malaria Elimination as Vaccine Rollout Begins in Kebbi and Bayelsa States
- President Tinubu Assures French Investors: Nigeria Is Open for Business and Ready for Investment
- House Deputy Spokesman Backs Tinubu’s Tax Reforms, Urges Support for Nationwide Economic Growth
Pension Fund Administrators (PFAs) are now required to process retirement benefits based on the new minimum wage of N70,000, in line with Section 4.1(g) of the revised regulations. Retirees with pensions below N23,333.33 have the option to either withdraw their entire RSA balance or continue receiving their current pension until the Minimum Pension Guarantee takes effect.
For retirees opting to withdraw their total RSA balance, their requests must be submitted to PenCom with the necessary documents, including a consent form confirming they were properly informed about the Minimum Pension Guarantee and their choice to receive the lump sum, a signed application letter, and the appropriate payment schedule.
PenCom has emphasized that this directive takes effect immediately, and all necessary steps must be taken to ensure compliance with the new regulations.