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PenCom workers permitted to use pension for mortgage

The National Pension Commission has started giving workers permission to use 25% of their Retirement Savings Accounts for mortgage.

According to The PUNCH, this was disclosed by the agency on Friday via a press statement titled, ‘PenCom approves guidelines on accessing Retirement Savings Account balance, for payment of equity contribution for residential mortgage by RSA holders’.

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 contributiona 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 employees or as a self-employed person.

The maximum amount that can be withdrawn is 25% of the total mandatory RSA balance as of the date of application, regardless of the value of the equity contribution required by the mortgage lender.

It was added that if 25% of a contributor’s RSA balance is insufficient for payment as an equity contribution, RSA holders may use the contingency portion of their voluntary contributions if any.

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

Eligibility, it added, are that a worker must, “Have an offer letter for the property duly signed by the property owner and verified by the mortgage lender.

“The RSA of the 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 is also eligible, provided he/she has made contributions for at least 60 months (five years) prior to the date of his/her application.

“RSA Holders that have less than three years to retirement are not eligible.

“Married couples, who are RSA holders, are eligible to make a joint application, subject to individually satisfying the eligibility requirements.

“RSA holders, if registered before July 1, 2019, must have their records updated through the RSA data recapture exercise.

“Application for equity contribution for residential mortgage shall be in person and not by proxy.”

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