How To Collect Your Pension Before You Retire

Under di National Pension Commission (PenCom) rules for Contributory Pension Scheme, Nigerian workers fit access part of dia retirement savings while dem still dey work, but e get conditions. Both employer and employee dey contribute monthly to Retirement Savings Account (RSA), and normally di savings dey for pension income at retirement. But if worker lose him job and no get another one for at least four months, e fit withdraw up to 25% of him RSA balance, provided e show formal resignation or disengagement letter from him employer. PenCom Q4 2022 report show say dem approve N6.31 billion (25% of RSA balances) for 9,966 RSA holders under 50 years wey dem no get job within four months.

Employees fit also make voluntary contributions to RSA, wey get flexibility but still dey under rules and taxes. Half of di voluntary contribution dey “contingent” for early withdrawal, while di other 50% dey “fixed” until retirement, and any withdrawal from contingent portion dey subject to income tax. Informal-sector workers fit withdraw up to 40% of RSA after three months contribution under Micro Pension Plan. Another option na to use RSA savings pay equity portion of home mortgage, up to 25% of RSA or contingent voluntary contributions. Experts warn say early withdrawals fit reduce pension available for retirement, meaning many wey use job-loss or mortgage withdrawals fit end up with small pension later.