Low-Income Pensioners Allowed Full Retirement Savings Withdrawal – PENCOM

The National Pension Commission (PENCOM) has announced that low-income pensioners can now withdraw their entire retirement savings en bloc or continue to receive their monthly pension, pending the approval of the Minimum Pension Guarantee. This decision stems from the revised regulation on retirement and terminal benefits, aligned with Nigeria’s new minimum wage of ₦70,000.

According to a memo signed by A.M. Salem, Head of the Surveillance Department at PENCOM, the policy adjustment is outlined in Section 4.1 (g) of the revised regulations. The memo, dated November 27, 2024, and obtained in Abuja, follows the signing of the National Minimum Wage Bill into law by President Bola Tinubu on July 29, 2024. The legislation raised the minimum wage from ₦30,000 to ₦70,000.

Previously, retirees were permitted to withdraw only one-third of their total Retirement Savings Account (RSA) balance. Under the updated regulations, pensioners whose RSA balance cannot generate a monthly or quarterly pension amounting to at least one-third of the minimum wage—₦23,333.33—can now choose to withdraw their entire savings or continue receiving monthly payments.

Pension Fund Administrators (PFAs) have been directed to apply the new minimum wage in processing retirement benefits. Requests for en bloc withdrawals must include specific documents, such as a consent form signed by the retiree confirming they were properly informed about the Minimum Pension Guarantee, a hard copy application letter with a physical signature, and a payment schedule as per an attached template.

The circular emphasizes strict compliance and states that the new guidelines take immediate effect.