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PenCom allows workers to pay mortgage with pension

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THE National Pension Commission (PENCOM) has
allowed workers to use their pensions to pay for mortgage.

In a statement on Friday, September 23, PENCOM said workers can use 25 per cent of their Retirement Savings Accounts as mortgage.

The statement said, “PenCom is pleased to inform all stakeholders and the general public, particularly RSA holders, that the commission has approved the issuance and immediate implementation of the guidelines on accessing RSA balance towards payment of equity contribution for residential mortgage by RSA holders.

“The approval is in line with Section 89 (2) of the Pension Reform Act 2014, which allows RSA holders to use a portion of their RSA balance towards payment of equity for residential mortgage.”

According to the PenCom, the guidelines cover pension contributors in active employment, either as a salaried employee or as a self-employed person.

It added that the maximum amount to be withdrawn is 25 per cent of the total mandatory RSA balance as of the date of application, irrespective of the value of equity contribution required by the mortgage lender.

Where 25 per cent of a contributor’s RSA balance is not sufficient for payment as equity contribution, RSA holders may utilise the contingency portion of their voluntary contributions, if any.

To qualify as a mortgage lender for the purpose, the commission stated, the company must be licensed by the Central Bank of Nigeria, comply with the Contributory Pension Scheme and have a valid Pension Clearance Certificate.

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Experienced Business reporter seeking the truth and upholding justice. Covered capital markets, aviation, maritime, road and rail, as well as economy. Email tips to jolaoluwa@icirnigeria.org. Follow on Twitter @theminentmuyiwa and on Instagram @Hollumuyiwah.

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