The National Pension Commission (PenCom) has approved the issuance and immediate implementation of guidelines for Retirement Savings Accounts (RSA) holders to access their RSA balances for payment of equity contributions for residential mortgages.
All stakeholders and the public, particularly holders of Retirement Savings Accounts (RSAs), were notified of the approval and immediate implementation of the Guidelines in a statement issued over the weekend in Abuja and signed by the Commission’s management.
The approval, according to PenCom, was in accordance with Section 89 (2) of the Pension Reform Act 2014 (PRA 2014), which allows RSA holders to use a portion of their RSA balance to pay equity for a residential mortgage.
The Guidelines apply to pension contributors who are in active employment, either as salaried employees or as self-employed individuals.
However, in order to qualify for the mortgage, PenCom stated that interested RSA holders (applicants) must have an Offer Letter for the property signed by the property owner and verified by the Mortgage Lender, as well as an RSA with both employer and employee mandatory contributions for a cumulative minimum period of 60 months (five years).
It went on to say that anyone who has contributed to the Micro Pension Plan (MPP) for at least 60 months (five years) prior to the date of application is also eligible.
Furthermore, the guideline stated that RSA holders with less than three years to retirement are ineligible, and that married couples who are RSA holders are eligible to make a joint application, subject to individually meeting the eligibility requirements.
The guideline states: “RSA holders, if registered before 1 July 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.”
The maximum withdrawal percentage must be 25% of the total mandatory RSA balance as of the date of application, regardless of the value of equity contribution required by the mortgage lender, according to PenCom.
It also stated that RSA holders may use the contingency portion of their voluntary contributions if 25% of their RSA balance is insufficient for payment as equity contribution.
To qualify as a Mortgage Lender for this purpose, the Commission stated that the company must be licensed by the Central Bank of Nigeria (CBN), comply with the Contributory Pension Scheme (CPS), and have a valid Pension Clearance Certificate (PCC).
It added: “The Commission shall publish names of the eligible mortgage lenders on its website.
“The Commission, hereby, invites interested RSA holders to contact their PFAs for more information and guidance. The complete guidelines can be found on www.pencom.gov.ng.”