Facts about Programmed Withdrawal as 349,839 retirees get N1.064tn lump sum

Facts about Programmed Withdrawal as 349,839 retirees get N1.064tn lump sum

Nike Popoola

No fewer than 349,839 Programmed Withdrawal (PW) retirees have gotten N1.064tn lump sum from their Retirement Saving Accounts (RSA).

They were also receiving N16.191bn monthly pensions as of the end of March, 2024.

Figures obtained by Daily Economy from the National Pension Commission (PenCom) on Q1, 2024 report revealed.

According to the Pension Reform Act (PRA) 2014 under section 7 (1), “A holder of the Retirement Saving Account (RSA) shall, upon retirement or attaining the age of 50 years, whichever is later, utilize the amount credited to his RSA for the following benefits-

“Withdrawal of lump sum from the total amount credited to RSA provided the amount left after the lump sum withdrawal is sufficient to procure programmed withdrawal or annuity for life.”

These are facts about Programmed Withdrawal

1-The retiree can access a lump sum amount of up to 25% and subject to a maximum of 50% of the RSA balance.

2-The monthly pension is based on the life span of the retiree

3-The retiree’s RSA balance is invested and the returns are reflected in the individual RSA. The retiree also gets quarterly statements.

4-In the event of death, the beneficiaries of the deceased have access to the total balance in the RSA.

5-A retiree on Programmed Withdrawal can opt for annuity at any time but cannot return to programmed withdrawal afterwards.

6-Pension Fund Administrators (PFAs) ensure that a monthly report on monthly pension payments is submitted to the commission.

Computation

Programmed Withdrawal is a product offered to retirees by Pension Fund Administrators (PFAs). It provides retiree a guaranteed income on a monthly or quarterly basis.

The computation of retirement benefits is based on – Gender, age, final salary (Basic, transport, housing), RSA balance

Monthly Pension Enhancement

-The MPE was introduced by PenCom in December 2017 to enable retirees enjoy increase in their monthly payment.

-Only retirees who are still receiving their monthly pension through a pension administrator are entitled to receive increase in their monthly pensions. However, those whose balances have not yielded significant growth will be unable to enjoy the increment but may benefit from subsequent batches.

-The eligible retirees are required to sign and execute a consent form before the newly computed monthly values can be implemented. -Retirees would not be allowed to use their Voluntary Contribution (VC) balance to augment enhanced pension

Requirements needed to sign up for Programmed Withdrawal

Data Recapture Exercise – this is mandatory for all RSA holders

Filled retirement form from the PFA

Retiree indemnity form (for FGN Treasury Funded Retirees only)

Retirement letter from employer

Payslip within three months of retirement

Two recent passport photographs

PenCom registration/Verification slip (FGN Treasury funded retirees only)

Sworn age declaration/Birth certificate

Means of ID (National ID/driver’s license/International passport)

Next-of-Kin update form

Programmed Withdrawal agreement