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PENCOM approves use of contribution for mortgage

The National Pension Commission has approval the use of 25% of workers Retirement Savings Accounts as payment for equity for mortgage.

A mortgage is a loan financing the purchase or maintenance of a property, land, or other types of rental properties.

In a statement on Friday, the commission said the approval is in line with Section 89 (2) of the Pension Reform Act 2014.

“PenCom is pleased to inform all stakeholders and the general public, particularly RSA holders, that the commission has approved the issuance and immediate implementation of the guidelines on accessing RSA balance towards payment of equity contribution for residential mortgage by RSA holders, the statement reads.

According to the guidelines, the approval covers pension contributors in active employment, either as a salaried employee or self-employed person.

It explained that the maximum amount to be withdrawn is 25% of the total mandatory RSA balance as of the date of application, irrespective of the value of equity contribution required by the mortgage lender.

The statement further said where 25% of a contributor’s RSA balance is not sufficient for payment as equity contribution, they may utilize the contingency portion of their voluntary contributions (if any).

Writing by Annabel Nwachukwu