Residential Mortgage: PenCom, PenOp List Requirements For Accessing Funds With RSA Balance

The National Pension Commission (PenCom) and the Pension Operators Association of Nigeria (PenOp) have highlighted the requirements for Retirement Savings Account (RSA) holders to access their equity contributions for the acquisition of residential mortgages.

Details on this were given in Lagos on Friday during the 2022 seminar organised by PenOp for pension journalists.

The seminar was themed: “Pension: An Opportunity to Own Your Own Home, An X-Ray of the New RSA Plan On Home Ownership.”

Presenting the theme paper, the Head of Investment Department, PenCom, Ibrahim Kangiwa, said for contributors under the Contributory Pension Scheme (CPS) to be eligible to use their RSA balance for the acquisition of residential mortgages, they must have contributed for five years (60 months) cumulative of employer and employee’s mandatory contributions.

He said the same thing was applicable to the contributors under the Micro Pension Plan (MPP), adding that married couples, who individually met the eligibility criteria, were also eligible.

On authorised limit for equity contribution that qualifies a contributor, Kangiwa put the maximum allowed at 25 per cent of the RSA balance, noting that “where 25 per cent of RSA balance is more than equity contribution, the RSA holder can only access the amount equivalent to equity contribution required.

“Where 25 per cent is not sufficient for equity contribution, RSA holder may utilise Voluntary Contribution (VC) in line with the Voluntary Contribution guidelines.

“Where 25 per cent is not sufficient for equity contribution, Micro Pension (MP) contributor may utilise contingency portion in line with MP guidelines.

“Where 25 per cent is insufficient as equity contribution, the RSA holder shall deposit the difference with the mortgage lender,” Kangiwa explained.

Those exempted from this initiative, according to Kangiwa, include RSA holders that have less than three years to retire; existing retirees on CPS; exempted persons under the PRA 2014 and RSA holders who do not have both employer and employee mandatory contributions for a cumulative minimum period of 60 months.

He said that equity contribution was not for refinancing an existing mortgage, outright purchase of property, and purchase of land, noting that the property shall be for residential purposes only.

Kangiwa said the objective of the initiative was to provide housing for first-time homeowners and improve the standard of living of RSA holders under the CPS by facilitating their ownership of residential homes during their working life.

Earlier in his remarks, the President, PenOp/Managing Director, Stanbic IBTC Pension Managers, Olumide Oyetan, emphasised the need for stakeholders to work together to ensure the successful implementation of the guidelines.

He said the successful implementation of this initiative would improve people’s welfare and move the country forward.


Please enter your comment!
Please enter your name here