Low-earning pensioners can now withdraw their entire retirement savings en bloc or opt to continue receiving monthly pensions, pending the implementation of the Minimum Pension Guarantee.
This development was announced in a memo issued by the National Pension Commission (PenCom) and signed by A.M. Salem, the Head of the Surveillance Department. The memo, dated November 27, 2024, was obtained by our correspondent in Abuja on Monday.
The adjustment aligns with Section 4.1 (g) of the revised regulation on the administration of retirement and terminal benefits, which incorporates the new national minimum wage of ₦70,000 signed into law by President Bola Tinubu on July 29, 2024.
Previously, retirees were only permitted to withdraw one-third of their Retirement Savings Accounts (RSAs). Under the revised regulation, retirees with RSA balances insufficient to provide a monthly or quarterly pension equivalent to one-third of the new minimum wage—₦23,333.33—can now choose to withdraw their entire savings or continue with the existing pension plan.
Addressed to pension fund administrators and custodians, the memo outlined directives for compliance. Pension Fund Administrators (PFAs) must apply the ₦70,000 minimum wage in processing retirement benefits. Retirees eligible for the en bloc withdrawal must provide a consent form confirming they have been informed about the Minimum Pension Guarantee and opted for the full withdrawal.
For retirees choosing the en bloc withdrawal, PFAs must submit the following to PenCom for approval:
- A signed hard-copy application letter.
- A payment schedule using the template provided by PenCom.
The memo emphasized immediate compliance and reiterated that all necessary measures should be taken to ensure alignment with the revised guidelines.
This policy change is expected to provide financial flexibility for low-earning retirees while addressing the economic realities of an increased minimum wage. It reflects PenCom’s efforts to align pension administration with the evolving needs of retirees under the revised wage structure.
