Overview of the Guidelines on Utilisation of Retirement Savings Account Balance towards Payment of Equity Contribution for Residential Mortgage
On 23 September 2022, the National Pension Commission (the “Commission”) announced the introduction of the Guidelines on Accessing Retirement Savings Account (“RSA”) Balance towards
Payment of Equity Contribution for Residential Mortgage by RSA Holders (the “Guidelines“). The Guidelines which were passed in line with the provisions of Section 89 (2) of the Pension Reform Act 2014 (the “Act”), allows Pension Fund Administrators (“PFAs”) of RSA holders to utilise part of their retirement savings as equity contribution, for the purpose of securing residential mortgages.
Objectives of the Guidelines
The primary objective of the Guidelines is to set out the eligibility criteria for RSA holders to apply part of their RSA balance for payment of equity contribution towards securing residential mortgages. It establishes documentation standards and implementation modalities for pension operators who process requests from RSA holders to access part of their RSA balances for this purpose.
In addition, the Guidelines aim to improve the standard of living of RSA holders under the Contributory Pension Scheme (“CPS”), by facilitating their ownership of residential homes during their working life and providing incentives to employees who are yet to open RSAs. Also, the Guidelines provide a sustainable source of long-term finance to the mortgage sector and spurs development of the housing sector in Nigeria.
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PENCOM Guidelines on Accessing RSA Balance for Residential Mortgage