Accessing Retirement Savings

Introduction: The National Pension Commission (PenCom) has recently approved and implemented guidelines allowing Retirement Savings Account (RSA) holders in the Contributory Pension Scheme (CPS) to access part of their RSA balance for equity contributions towards residential mortgages. This development follows the amendments introduced by the Finance Act of 2020, enabling Pension Fund Administrators (PFAs) to apply a percentage of pension assets for mortgage equity contributions. Eligibility and Benefits: To qualify, RSA holders must be actively employed or self-employed, with at least three years before retirement. The Guidelines stipulate a requirement of 60 months of contributions to the RSA, reflecting both employer and employee contributions. Key Benefits Under the Guidelines: Procedure for Application: Potential Impact: Prior to these Guidelines, RSA holders could not withdraw from their mandatory RSA before the age of 50, except in specific circumstances. The new era introduced by the Guidelines allows individuals to access funds for residential mortgages before retirement, providing an additional avenue for financial flexibility. This initiative is a commendable step by the government, encouraging eligible individuals to make the most of this opportunity. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.