The National Pension Commission (PenCom) has introduced a transformative initiative allowing retirees to access a significant portion of their Retirement Savings Account (RSA) balance as a lump sum, provided that their monthly pension is at least half of their final salary before retirement. This adjustment enables retirees to access up to 70% of their RSA balance, provided the remaining funds are sufficient to generate a monthly pension that meets the 50% threshold of their final salary.
PenCom’s Director-General, Ms. Omolola Oloworaran, announced these changes at the PenCom Journalist Workshop themed Tech-Driven Transformation: Shaping the Pension Landscape. She highlighted that these adjustments aim to make retirement processes more efficient and user-friendly. The revised withdrawal template now permits retirees to access a lump sum from their RSA, with the condition that the remaining balance can fund an annuity or programmed withdrawal that guarantees no less than 50% of their final salary.
Additionally, PenCom has removed the age limitation for retirees, allowing those aged 65 and above to benefit from the new system. These reforms apply to employees retiring under the Contributory Pension Scheme (CPS) who have yet to begin their programmed withdrawal.
Ms. Oloworaran also noted the significant progress in the pension sector, with over 10.5 million contributors and assets exceeding N21.9 trillion as of October. However, she acknowledged challenges, such as inflation impacting pensioners’ purchasing power, and emphasized PenCom’s ongoing efforts to improve pension services, including the launch of the e-Application Portal for Pension Clearance Certificates (PCC), which has streamlined the process for over 38,000 businesses since its introduction.
PenCom’s micro-pension initiative is also a key focus, aimed at expanding coverage to the informal sector, ensuring no one is left behind, regardless of their income level. Through technological innovations, PenCom aims to further scale and enhance the impact of this initiative, ensuring that pension benefits are accessible to all
