PENCOM Allows Low-Income Earners to Withdraw Total Retirement Savings
The National Pension Commission (PENCOM) has announced that low-income pensioners can now choose to withdraw their entire retirement savings en bloc, or continue receiving their monthly pensions, pending the approval of the Minimum Pension Guarantee.
This new rule, outlined in a memo dated November 27, 2024, follows the revision of the regulations concerning retirement and terminal benefits. The revision aligns with the new national minimum wage of N70,000, as signed into law by President Bola Tinubu on July 29, 2024.
Previously, retirees were allowed to withdraw only one-third of their total Retirement Savings Accounts (RSAs). However, under the updated regulation, if a retiree’s pension is less than one-third of the minimum wage (which is now N23,333.33), they can choose to take the entire balance from their RSA.
PENCOM has instructed Pension Fund Administrators (PFAs) to apply the new N70,000 minimum wage when processing retirement benefits. Retirees who meet the criteria of having a pension lower than N23,333.33 per month or quarterly can opt to receive the remaining balance in their RSA in a lump sum or continue with their current pension payments.
To access the full balance, retirees must submit a consent form confirming they were properly informed about the Minimum Pension Guarantee, along with a signed application letter. This change is effective immediately, and all necessary documentation must be sent to PENCOM for approval.
