How to withdraw voluntary contribution from Pension firms

How to withdraw voluntary contributions from Pension firms

Workers have been told how to withdraw from their voluntary contribution in their Retirement Savings Accounts every two years.

This was disclosed during a presentation by the Pension Funds Operators Association of Nigeria, PenOp, to create awareness on pension.

It stated, “You are entitled to withdraw up to 50 per cent from your additional voluntary contributions once every two years.

“When you need money, you are allowed to take from your voluntary contributions.”

“Voluntary contributions under these guidelines shall be non-obligatory contributions made by any employee in the formal sector through the employer.”

The Pension Reform Act 2014 allows employees to make voluntary contributions into their Retirement Savings Account, in addition to their mandatory pension contributions, so as to enhance their retirement benefits.

According to the guidelines of the National Pension Commission, employees of organisations with less than three employees as well as self-employed persons as provided in Section 2 (3) of Pension Reform Act 2014 (PRA 2014) should be covered under the guidelines for micro pensions.

The commission said part of the objectives was: “To establish uniform set of rules for the operation of voluntary contributions and eligibility criteria for participation in voluntary contributions;

“To provide the procedure for making voluntary contributions, provide necessary safeguards and modalities for its withdrawals;

“To utilise voluntary contributions for the purpose of enhancing future retirement benefits for active or mandatory contributors.”

The commission said retirees under Contributory Pension Scheme are encouraged to utilise part or all of the voluntary contributions to augment their existing pension.

All eligible contributors who intend to make additional voluntary contributions are advised to maintain their existing Retirement Savings Accounts, RSAs, while the new contributors should open accounts with any Pension Fund Administrator, PFA of their choice, into which their contributions should be remitted as voluntary contributions.

Voluntary contributions should be made from the employee’s legitimate income.

Prospective contributors are to notify their employers of their intentions to make voluntary contributions and the amount to be deducted from their monthly income and remitted as voluntary contributions.

 

Author: Greg