Before the Pension Reform Act 2004 was amended under the Contributory Pension Scheme, many workers were constrained from having access to the contributions in their Retirement Savings Account. They must either get to retirement age and exit paid employment or be sacked from work by their employers. They were also required to produce evidence of forced exit from work to their Pension Fund Administrators to apply for 25 per cent of the balance in their RSA.

Under the new dispensation, workers now have more access as they no longer have to produce evidence of being sacked before they can access part of this contribution. The new Pension Reform Act 2014, which replaces the PRA 2004 makes some amendment to allow workers withdraw from RSA.

PRA 2004 allowed only an employee that was sacked to access 25 per cent of his contributions after waiting for six months without getting another job. This posed a lot of challenges for employees who were forced to resign by their employers because they could not produce evidence of being sacked to their PFAs, to qualify them to withdraw from their savings. Only employees that were sacked were able to have this fund.

However, Section 7 (2) under the PRA 2014 allows a worker who voluntarily retires, resigns or was disengaged from employment to access 25 per cent of his RSA if he was unable to get another job. The law also reduced the waiting period of accessing this fund to four months. The essence is to allow the worker to have some funds to live on or invest in productive ventures, pending the time he is able to have a stable source of income.

Managing Director, Premium Pension Limited, Mr. Wilson Ideva, said under the old PRA 2004, it was not possible for the employee to voluntarily resign and demand for part of his RSA contributions.

“But the newly amended act 2014 allows for withdrawal of 25 per cent after four months without employment whether by resignation or termination,” Premium PFA’s boss said.

The Managing Director, NLPC, PFA, Mr. Wale Kolawole said the PRA 2014 had amended some areas in the pension law that allows contributors to have access to their funds.

According to him, under the former law, a worker had to wait for a minimum of six months if he was disengaged from service and had not reach 50 years before he could apply for part of his RSA contribution.

“Experience has shown that the period needs to be shortened, so in the new Act, it is four months,” he said.

Another thing the new Act had also taken care of, he explained was the issue of the mode of exit. According to him, the criterion for 25 per cent withdrawal was no longer dependent on if the person resigned or was sacked, as long as he was out of work.

“There used to be a contention in the past. Some employees complained they were forced to resign, but documents they had to produced showed that they resigned, and this was not allowed,” he said.

Under the old Act, he noted that it was assumed that before a worker could resign, he must have had something else he wanted to do if he was not up to 50 years.

“But the new Act has taken care of that because disengagement is disengagement, whether you resigned by yourself or your employer asked you to go. If you stay for four months and you don’t get another employment, you can approach your PFA to take 25 per cent of your RSA account,” he said.

When he eventually retires and is up to the age of 50, he said, he can come back when the appropriate retirement benefit approach will be applied.

To access 25 per cent of the RSA contribution, an affected individual is required to present some documents to his PFA which are letter of termination of appointment issued by the employer or resignation letter; last three months’ pays slips; letter requesting for 25 per cent payment of RSA balance; and evidence of accrued pension rights, if any, for public sector workers.

Others are bank statement or letter of introduction from the bank; proof of age (birth certificate or sworn declaration of age); letter from the employer confirming full remittance of all contributions made to the RSA for the private sector worker; PenCom retiree indemnity form for public sector workers; four passport photographs; and a form to be given by the PFA.


http://www.punchng.com/business/insurance/workers-can-now-withdraw-from-retirement-savings-account/

This is one FÜCKING good news. FÜCKING glad the FÜCKING waiting period has been shortened to 4 months & the FÜCKING mode of exit equally addressed.
FÜCKING good

Wasting of time which is one of the factors affecting this nation is a major loophole in the amended act as it did not speculate the turn around time that the PFA should not exceed before making the funds available.

Just like insurance companies, it may take them forever to effect payments, hence; this is really no great news. Our legislators should think better and block every loophole in their laws next time

Good move

why must we resgin before geting 25%.

Nonsense.

thegoodone2:
why must we resgin before geting 25%.

Is that what you read from the article? SMH

@topic, we keep fine tuning it till it becomes perfect.

Gboliwe:


Is that what you read from the article? SMH

@topic, we keep fine tuning it till it becomes perfect.

pls. go through it again

thegoodone2:
pls. go through it again

That's what I was going to say initially. Please go through it again.

This may be funny but worth considering.
What if I just want to borrow from it and return the borrowed money (which is still mine anyway) in about a month or two maximum?
I am 10000% sure I will return the money (but I am sorry I cannot pay interest on my own money ).
But seriously, I have some considerable amount doing absolutely nothing in my PFA. I just need to borrow some part of it and I can prove that I will return the money. Can this be worked out?
Experts should please chip in a word or two.

thegoodone2:
why must we resgin before geting 25%.

In otherwords, access/draw from your RSA even while you are in active service?
Is that not a direct opposite of the main objective of the plan in the first place?

Kx:


In otherwords, access/draw from your RSA even while you are in active service?
Is that not a direct opposite of the main objective of the plan in the first place?

is it possible to withdraw while in active service?

thegoodone2:
is it possible to withdraw while in active service?

Not possible- the PFA does not allow such but your earlier question sounded like that is what you'd prefer when u asked:
"

thegoodone2:
why must we resgin before geting 25%.