Low-earning pensioners in Nigeria can now withdraw their entire Retirement Savings Account (RSA) balances in one lump sum or continue to receive their monthly pensions, pending the implementation of the Minimum Pension Guarantee.
This directive was detailed in a memo issued by the National Pension Commission (PENCOM), signed by A.M. Salem, Head of the Surveillance Department.
The memo, dated November 27, 2024, and obtained in Abuja, announced the change as part of the revised regulation on the administration of retirement and terminal benefits.
It aligns with Nigeria’s new national minimum wage of ₦70,000, signed into law by President Bola Tinubu on July 29, 2024.
Previously, retirees were restricted to withdrawing only one-third of their total RSA balances.
However, the revised regulation now allows pensioners whose savings cannot provide a monthly or quarterly pension of at least one-third of the prevailing minimum wage,₦23,333.33 to withdraw their entire balance in one payment.
The memo explained that the adjustment reflects Section 4.1(g) of the revised regulation, stating: “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.”
Pension Fund Administrators (PFAs) are instructed to apply the ₦70,000 minimum wage when processing retirement benefits in line with this regulation.
Retirees affected by this change can choose between withdrawing their remaining RSA balance in full or continuing with their current pension payments until the Minimum Pension Guarantee is implemented.
The directive emphasized that any requests for en bloc payments must be accompanied by a signed consent form indicating that the retiree was properly informed about the Minimum Pension Guarantee.
A hard copy application letter, signed manually by the retiree, is also required, along with a payment schedule prepared according to the attached template.
PENCOM urged PFAs to ensure full compliance with the directive, which took immediate effect.
This policy aims to provide financial relief for low-income retirees while ensuring compliance with Nigeria’s updated wage standards.
