Acting Director-General, National Pension Commission, Mrs. Chinelo Anohu-Amazu
Workers will no longer have to wait till they retire from active service or are laid off before they can have access to funds in their Retirement Savings Account under the Contributory Pension Scheme, investigation has revealed.
Sources told our correspondent on Wednesday that the National Pension Commission was drafting a guideline that would permit the workers to get loans from the huge funds kept with the pension operators.
It was learnt that the commission and the operators were considering allowing the contributors to borrow from the funds so that they could serve them while still in active service. The pension funds under management rose to N4.4tn at the end of June 2014.
The guideline would set the requirements for getting loans from RSAs and when it would actually commence.
The Managing Director, NLPC Pension Fund Administrator, Mr. Wale Kolawole, said the pension fund management had to be guided by necessary laws to prevent workers from abusing the opportunity.
According to him, workers should not be allowed to withdraw part of their pension contributions except they meet the requirements of the law.
He said the Pension Reform Act 2014 stated that a PFA shall not apply pension fund assets under its management by way of loans and credits or as collateral for any loan taken by a holder of retirement savings account or any person whatsoever.
Notwithstanding this provision, Kolawole said Section 89 subsection 2 of the Act made provisions for exceptions by allowing contributors to have access to the funds for residential mortgage.
“A PFA may, subject to guidelines issued by the commission, apply a percentage of the pension assets in the retirement savings accounts towards the payment of equity contribution for payment of residential mortgage by a holder of a RSA,” he said.
Kolawole also said that under the old pension law, the PFAs could not directly invest in real estate but could do so now under the new Act.
The PRA 2014 states other conditions for accessing the funds. Section seven, subsection 1 says a holder of a RSA shall, upon retirement or attaining the age of 50 years, whichever is later, utilise the amount credited to his pension account, either as annuity for life with insurance companies, or as programmed withdrawal with the PFAs.
The law also states in section seven, subsection two that where an employee voluntarily retires, disengages or is disengaged from employment as provided for under section 16 (2) and (5) that the employee may, with the approval of the commission, withdraw an amount of money not exceeding 25 per cent of the total amount credited to his RSA, provided that such withdrawals shall only be made after four months of such retirement or cessation of employment and the employee does not secure another employment.
According to the new Act, an employee who disengages or is disengaged from employment before the age of 50 years and is unable to secure another employment within four months of such disengagement may make withdrawal from his RSA.
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