By Abigail Philip David
The National Pension Commission (PENCOM) has announced that low-income retirees can now withdraw their entire retirement savings en bloc or continue to receive monthly pensions, pending the implementation of the Minimum Pension Guarantee.
This was disclosed in a memo signed by A.M. Salem, Head of the Surveillance Department at PENCOM, and dated November 27, 2024. The memo, obtained by reporters in Abuja on Monday, outlines the revised regulation following the recent increase in the national minimum wage to ₦70,000.
Under the new policy, retirees whose Retirement Savings Account (RSA) balances are insufficient to provide a monthly or quarterly pension of at least one-third of the new minimum wage—₦23,333—are eligible to withdraw their entire RSA balance.
Policy Updates
The memo highlighted Section 4.1 (g) of the revised regulation on retirement benefits, which states:
*“Where the RSA balance cannot provide a pension or annuity 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.”*
Previously, retirees were only permitted to withdraw one-third of their RSA savings, leaving the remaining balance for monthly pensions. However, with the new minimum wage enacted by President Bola Tinubu on July 29, 2024, retirees now have the flexibility to choose between withdrawing their total savings or continuing with regular pension payments.
Instructions to Pension Fund Administrators (PFAs)
PENCOM directed all Pension Fund Administrators to adopt the new minimum wage of ₦70,000 in processing retirement benefits. Specific guidelines include:
– Retirees with monthly pensions below ₦23,333 can opt for a full withdrawal or continue receiving their pensions until the Minimum Pension Guarantee comes into effect.
– PFAs must submit payment requests for retirees choosing en bloc withdrawals, accompanied by required documents for PENCOM’s approval.
Required Documentation
The memo outlined the necessary documents for en bloc withdrawal requests:
1. A consent form confirming the retiree was informed about the Minimum Pension Guarantee and opted for a full withdrawal.
2. A handwritten application letter (no electronic signatures) from the retiree requesting the withdrawal.
3. A payment schedule based on the approved template.
PENCOM instructed PFAs to ensure full compliance with the circular, which took immediate effect.
