The National Pension Commission (PENCOM) has announced that low-income pensioners are now allowed to withdraw their entire retirement savings or continue receiving monthly pensions, pending the approval of the Minimum Pension Guarantee (MPG).
This directive was outlined in a memo signed by A.M. Salem, Head of the Surveillance Department of PENCOM, and dated November 27, 2024. The document, obtained in Abuja, stated that the change aligns with Section 4.1 (g) of the revised regulations on retirement and terminal benefits, following the recent increase in Nigeria’s minimum wage to ₦70,000.
Previously, retirees could only withdraw up to one-third of their Retirement Savings Accounts (RSAs). However, with the signing of the National Minimum Wage Bill into law by President Bola Tinubu on July 29, 2024, PENCOM revised its regulations.
The memo highlighted that retirees whose RSA balances cannot provide a monthly or quarterly pension of at least one-third of the new minimum wage (₦23,333.33) are now eligible to withdraw the entire balance in their RSAs at once. Alternatively, they can opt to continue receiving their current monthly or quarterly pensions until the MPG is implemented.
Pension Fund Administrators (PFAs) have been directed to comply with this regulation, ensuring retirees are fully informed about their options. Retirees choosing to withdraw their RSA balances en bloc must submit a consent form, a signed application letter, and a payment schedule to PENCOM for approval.
The circular, which took immediate effect, aims to provide more financial flexibility for low-earning retirees, ensuring that they can access their funds to meet their needs under the prevailing economic conditions.
