PENCOM cautions States against withdrawals from RSA
The Nigerian Pension Commission has warned on the negative consequences of state withdrawing from workers Retirement Savings Accounts (RSA). Pencom disclosed recently via publication on its website that state government have been asking for deductions from their state’s RSA.
“It has come to the Commission’s attention that some State Governments, as employers, have been requesting for deductions to be made from the Retirement Savings Account (RSA) balances of their employees upon their retirement to settle outstanding financial obligations owed to the Government or their employers”
Daily Times recall that a Retirement Savings Account (RSA) is contribution Plan under the Pensions Reform Act 2014, which can be opened by every employee in an organization with 3 staff or more. Staff will be required to open and maintain a personal Retirement Savings Account (RSA) in their own names after which they would be issued a unique Personal Identification Number (PIN) by the National Pensions Commission.
Monthly deductions and remittances of 10 per cent and 8 per cent of total monthly emolument are contributed by the employer and employee respectively into the RSA. Pencom stated that the overall aim of the RSA is to ensure that upon retirement, loss of job, invalidity or death, employees under the scheme would have access to some income through the various pension options.
Funds under the scheme are invested on behalf of the Contributors. Our Retirement Savings Account (CPL Value Fund) has consistently provided superior returns (relative to competition) on investment for all our contributors for the past eight years.
In line with regulations governing the administration of the Pensions industry each employee covered under the scheme is expected to complete an RSA registration form from a PFA, which will be forwarded to the National Pension Commission (PENCOM) for the generation of a unique Personal Identification Number (PIN).
The employee subsequently, is expected to submit the PIN to the company’s HR/Finance department for the purpose of making monthly remittance. A Registration Certificate containing Personal Identification Number (PIN) and Account number plus a welcome letter is issued to the employee for retention.
The Nigerian Pension Commission (Pencom) is also making necessary progress to fully unbundle a micro pension plan that would assist in bringing low-income earners into the contributory pension scheme to insulate them against old-age poverty.
The micro insurance depository scheme is slated to benefit the informal sector which accounts for over 50 per cent of the GDP.
