Low-income pensioners can now choose to withdraw their entire Retirement Savings Account (RSA) balance at once or continue receiving monthly pensions, pending the implementation of the Minimum Pension Guarantee.
This development was announced in a memo from the National Pension Commission (PenCom), signed by the Head of the Surveillance Department, A.M. Salem, and dated November 27, 2024.
The memo was addressed to Pension Fund Administrators and custodians.
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The memo stated, “Section 4.1 (g) of the Revised Regulation on the Administration of Retirement and Terminal Benefits provides that where the RSA balance cannot provide a monthly or quarterly pension 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.”
This change follows the National Minimum Wage Bill, signed into law by President Bola Tinubu on July 29, 2024, which raised the minimum wage from N30,000 to N70,000. Consequently, retirees whose monthly pensions are below N23,333.33 (one-third of the new minimum wage) can opt for full withdrawal of their RSA balance or continue their monthly payouts.
PenCom directed PFAs to process retirement benefits under the new minimum wage benchmark. For retirees opting for en bloc withdrawals, PFAs must submit specific documentation to the commission for approval.
The required documents include:
- A consent form confirming the retiree was informed about the Minimum Pension Guarantee and opted for a full withdrawal.
- A handwritten application letter signed by the retiree requesting the withdrawal.
- A payment schedule based on PenCom’s specified template.
The commission emphasized, “You are therefore required to take all necessary measures to ensure full compliance with this circular. This circular takes immediate effect.”
