National Pension Commission aligns benefits with new ₦70,000 minimum wage, offering flexibility for retirees with small pension balances
Low-earning pensioners now have the option to withdraw their entire retirement savings en bloc or continue receiving monthly pensions, pending the implementation of the Minimum Pension Guarantee. This update aligns with a recent directive from the National Pension Commission (PenCom), following the adoption of the revised regulation on retirement and terminal benefits.
According to a memo signed by A.M Salem, Head of PenCom’s Surveillance Department, the new policy is based on Section 4.1 (g) of the updated regulation. This provision allows retirees whose Retirement Savings Account (RSA) balances cannot sustain a monthly or quarterly pension of at least one-third of the prevailing minimum wage to withdraw their total savings.
The commission emphasized that this adjustment is necessitated by the recent increase in the national minimum wage, from ₦30,000 to ₦70,000, signed into law by President Bola Tinubu on July 29, 2024. Consequently, retirees with monthly pensions below ₦23,333.33 (one-third of the new minimum wage) may now choose between withdrawing their remaining RSA balance in full or continuing with the current pension structure until the Minimum Pension Guarantee is operational.
Instructions to Pension Fund Administrators:
The memo directed Pension Fund Administrators (PFAs) to process these requests under strict compliance with the updated rules. Required documentation includes:
- A consent form confirming that the retiree has been adequately informed about the Minimum Pension Guarantee and has opted to withdraw their RSA balance in full.
- A hard copy application letter signed by the retiree requesting the withdrawal.
- A payment schedule formatted according to the provided template.
PenCom urged PFAs to ensure retirees are fully informed of their options and take immediate measures to comply with this directive. The circular takes effect immediately.
