The National Pension Commission has declared that low-income pensioners now have the option to withdraw their entire retirement savings at once or continue receiving their monthly pensions while awaiting the implementation of the Minimum Pension Guarantee.
This directive is outlined in a memo signed by the PenCom’s Head of the Surveillance Department, identified as A.M. Salem.
The document, obtained in Abuja on Monday and dated November 27, 2024, introduces changes based on Section 4.1 (g) of the updated regulation on retirement and terminal benefits, reflecting the recent adjustment of the national minimum wage to ₦70,000.
Previously, retirees were restricted to accessing only one-third of their total Retirement Savings Accounts.
Addressed to pension fund administrators and custodians, the memo highlights that President Bola Tinubu officially enacted the National Minimum Wage Bill on July 29, 2024. It states:
“The commission has noted that President Bola Tinubu had on Monday, 29 July 2024, signed the National Minimum Wage Bill into law. Accordingly, the new National Minimum Wage Act increased the National Minimum Wage from N30,000.00 to N70,000.00.”
The memo continues by explaining the implications of Section 4.1 (g) of the regulation, “Section 4.1 (g) of the Revised Regulation on the Administration of the Retirement and Terminal Benefits (the Regulation) provides that where the Retirement Savings Account balance cannot provide a monthly/quarterly 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.”
PenCom directed administrators to apply the new ₦70,000 minimum wage in processing retirement benefits, “Retirees whose monthly/quarterly pensions are less than ₦23,333.33, representing one-third of the current minimum wage of ₦70,000.00, be allowed to choose between receiving the outstanding balance in their RSAs en bloc or continuing to receive their current monthly/quarterly pensions pending the commencement of the Minimum Pension Guarantee.”
The memo further outlines the required documentation for retirees opting for lump sum payments, including, “A consent form reflecting that the PFA properly enlightened the retiree on the Minimum Pension Guarantee and that he/she chose to receive the outstanding balance in the RSA en bloc. A hard copy application letter, not an electronic signature, signed by the retiree to withdraw the outstanding balance in the RSA. The payment schedule in the template is attached as Appendix 1.”
PenCom emphasized the importance of compliance, noting that the directive takes immediate effect.
