BY EDMOND ODOK – Cheering news have come the way of Retirement Savings Accounts (RSA) holders with the National Pension Commission (PenCom) approving the issuance and immediate implementation of the guidelines on accessing their RSA balance for equity contribution payment of residential mortgages.
According to the Commission, the latest development is in line with Section 89 (2) of the Pension Reform Act 2014 (PRA 2014), which allows RSA holders to use a portion of their RSA balance towards the payment of equity for a residential mortgage.
A statement released by the PenCom management in Abuja over the weekend stated that all stakeholders and the public, particularly RSA holders in the Contributory Pension Scheme (CPS), have been duly notified of the approval and immediate implementation of the Guidelines.
The statement further said the approved Guidelines cover pension contributors in active employment, either as salaried employees or as self-employed people.
It however said to qualify for the mortgage, interested RSA holders (applicants) must have an Offer Letter for the property duly signed by the property owner and verified by the Mortgage Lender, adding that the RSA of the applicant will have both employer and employee’s mandatory contributions for a cumulative minimum period of 60 months (five years).
Additionally, contributors under the Micro Pension Plan (MPP) are also eligible, provided they have made contributions for at least 60 months (five years) prior to the date of his or her application.
The Guidelines also indicated that RSA Holders with less than three years to retirement are not eligible, and that married couples, who are RSA holders, are eligible to make a joint application, subject to individually satisfying the eligibility requirements.
By the provisions as captured in the Guidelines; “RSA holders, if registered before 1 July 2019, must have their records updated through the RSA data recapture exercise.”
Similarly, “Application for equity contribution for residential mortgage shall be in person and not by proxy.”
The statement, which also tackled the issue maximum withdrawal percentage, said the coverage must be 25 percent of the total mandatory RSA balance as at the date of application, irrespective of the value of equity contribution required by the mortgage lender.
However, where 25 percent 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.
Addressing the contentious issue of eligibility, PenCom said qualification as a Mortgage Lender for this purpose would entail the company getting the Central Bank of Nigeria (CBN) licence, complying with the Contributory Pension Scheme (CPS), and having a valid Pension Clearance Certificate (PCC).
“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”, the statement said
