SAT, 24 SEPT, 2022-theGBJournal| The National Pension Commission Friday approved the issuance and immediate implementation of the new guidelines on accessing Retirement Savings Account (RSA) balance towards payment of equity contribution for residential mortgage by RSA holders.
PenCom said the approval is in line with section 89 (2) of the Pension Reform Act 2014 (PRA2014), which allows RSA holders to use a portion of the RSA balance towards payment of equity for residential mortgage by RSA Holders.
The guidelines cover pension contributors in active employment, either as a salaried employee or as a self-employed person.
Pension set out conditions which eligible applicants must meet which include having an Offer Letter for the property duly signed by the property owner and verified by the Mortgage Lender; the RSA applicant shall have both employer and employee’s mandatory contributions for a cumulative minimum period of 60 months (five years); a Contributor under the Micro Pension Plan (MPP) is also eligible, provided he/she has made contributions for at least five years prior to the date of his/her application.
RSA holders that have less than three years to retirement noted that RSA holders that have less than three years to retirement are not eligible.
It said RSA holders, if registered before 1 July 2019, must have their records updated through the RSA data recapture exercise and application for equity contribution for residential mortgage shall be in person not by proxy.
According to PenCom; the maximum amount to be withdrawn shall be 25% of the total mandatory RSA balance as at the date of application, irrespective of the value of equity contribution required by the mortgage lender.
‘’Where 25% of a contributor’s RSA balance is not sufficient for payment as equity contribution, RSA holders may utilize the contingency portion of their voluntary contributions-if any.
To qualify as a Mortgage Lender for this purpose, PenCom said; the company must be licensed by the Central Bank of Nigeria (CBN), comply with the Contributory Pension Scheme (CPS) and have valid Pension Clearance Certificate (PCC).
The Commission promised to publish names of the eligible lenders on its website and, it invited interested RSA holders to contact their PFAs for more information and guidance.
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