The Nigerian government has announced that low-income earners can now withdraw their entire retirement savings from their pension accounts.
This decision comes in the wake of the recent increase in the national minimum wage to N70,000, as signed into law by President Bola Tinubu on July 29.
The National Pension Commission (Pencom) issued a memo detailing this change, which was signed by A.M Salem, Head of the Surveillance Department.
The memo states, "Retirees whose monthly or quarterly pensions are less than N23,333.33, representing one-third of the current minimum wage, be allowed to choose between receiving the outstanding balance in their RSAs en bloc or continuing to receive their current monthly/quarterly pensions pending the commencement of the Minimum Pension Guarantee."
Previously, retirees were restricted to withdrawing only one-third of their total Retirement Savings Accounts (RSAs).
However, with the new regulation under Section 4.1 (g), if a retiree's RSA balance cannot provide a pension or annuity of at least one-third of the prevailing minimum wage, they are permitted to take the entire balance in a lump sum.
This policy aims to offer greater financial flexibility to low-income retirees, allowing them to better manage their funds in light of economic changes.
Pension Fund Administrators have been directed to apply the new minimum wage when processing retirement benefits, ensuring that retirees can access their savings more readily.
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