From Uche Usim, Abuja
The National Pension Commission (PenCom) has released new guidelines for Retirement Savings Account (RSA) holders to access their equity contribution for residential mortgages.
RSA is a pension account maintained with a Pension Fund Administrator (PFA) into which monthly contributions of employer and employee are paid.
The Commission, in a statement, said the approval draws strength from Section 89 (2) of the Pension Reform Act 2014 (PRA 2014), which allows RSA holders to use a portion of their RSA balance towards payment of equity for residential mortgages.
The guidelines cover pension contributors in active employment, either as a salaried employee or as a self-employed person.
The maximum amount to be withdrawn by RSA holders is 25 per cent of the total mandatory RSA balance as at the date of application, irrespective of the value of equity contribution required by the mortgage lender. Where 25% 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 (if any).
Interested persons must meet set criteria including; having an Offer letter for the property duly signed by the property owner and verified by the Mortgage Lender; the RSA of the applicant shall have both employer and employee’s mandatory contributions for a cumulative minimum period of 60 months (five years).
A Contributor under the Micro Pension Plan (MPP) is also eligible, provided he/she has made contributions for at least 60 months (five years) prior to the date of his/her application.
RSA holders that have less than three years to retire are not eligible.
Married couples, who are RSA holders, are eligible to make a joint application, subject to individually satisfying the eligibility requirements.
RSA holders, if registered before 1 July 2019, must have their records updated through the RSA data recapture exercise.
Application for equity contribution for residential mortgage shall be in person and not by proxy.
To qualify as a mortgage lender for this purpose, the company must be licensed by the Central Bank of Nigeria (CBN), comply with the Contributory Pension Scheme (CPS) and have a valid Pension Clearance Certificate (PCC).
PenCom assured that it would publish names of the eligible mortgage lenders on its website.