The Pension Commission of Nigeria (PenCom) Approves Retirement Savings Account (RSA) As Equity for Residential Mortgages.
During the active work period of a person’s life, the employer and the employee are mandated by law to contribute to a certain investment account named the “pension fund account” from which regular payment is made to the employee at retirement from active service. This noble initiative is called pension. However, due to economic strain, most employees have their dreams of owning a home dashed during their time in service. Hence, retirement is often seen as coming too early and unprepared for as many dreams are still hanging with the future looking bleak.
Good news! The Pension Commission of Nigeria (PENCOM) has approved the issuance and immediate implementation of the Guidelines on Accessing Retirement Savings Account (RSA) Balance towards Payment of Equity Contribution for Residential Mortgage by RSA Holders. This means that pensioners who hold an account with the National Pension Commission (NPC) can now use up to 25% of their retirement savings accounts (RSA) to pay for their residential mortgages! If you are a pensioner and have an RSA, this is great news! You do not have to worry about losing your entire retirement savings if you want to pay off your home loan or improve your living conditions.
You can also see how much money your retirement savings account is worth by logging into www.pencom.gov.ng and checking out what percentage of your total retirement savings account balance you can use for equity contributions towards your residential mortgage. Please, find below some highlights:
- Eligibility: The Guidelines cover pension contributors in active employment, either as salaried employees or as self-employed persons.
- Maximum Withdrawal Percentage: The maximum amount to be withdrawn shall be 25% of the total mandatory RSA balance as of the date of application, irrespective of the value of equity contribution required by the mortgage lender.
- Eligibility criteria for mortgage lender: To qualify as a Mortgage Lender for this purpose, the company must be licensed by the Central Bank of Nigeria (CBN), comply with the Contributory Pension Scheme (CPS), and have a valid Pension Clearance Certificate (PCC).
We are excited to announce the availability of affordable properties under the FMBN-NHF/NECA/NLC Rent-to-Own and direct Mortgage Schemes located at Mowe, Ogun State; Ikorodu, Lagos State; and other parts of Nigeria. Member companies are urged to encourage their staff to take advantage of the PenCom Guidelines on the use of RSA Balance for equity contribution to benefit from the various FMBN/NECA/NLC/TUC Housing Schemes across the country. We are just getting started.
Follow us on all our social media platforms and stay in touch with our website, you would be able to keep up with all of the new and exciting information we have coming up.