ALP Review on Guidelines on Accessing Retirement Savings Account (RSA) Balance Towards Payment of Equity Contribution For Residential Mortgage By RSA Holders (PENCOM GUIDE 2022)

Section 89 (2) of the Pension Reform Act (PRA 2014), allows RSA holders or their pension fund administrators on their behalf to utilize part of their retirement savings as equity contribution for the purpose of securing residential mortgage, subject to guidelines to be issued by the National Pension Commission. (PENCOM)

Following this section, the Guidelines on Accessing Retirement Savings Account Balances for Payment of Equity Contribution for Residential Mortgages were approved by the National Pension Commission (PENCOM), which was announced in a press release on the 23rd of September 2022.

Investing in real estate is one of the most popular, profitable, and stable investment choice(s). Accessing the RSA to secure residential mortgage will be beneficial to employees in Nigeria, considering that investment of pension funds is not subject to tax and as such the investment would be tax-free. Also taking into account the rate of inflation, it is in the employees’ advantage to access the fund in the RSA as inflation may affect its purchasing power in future.

This article will discuss the guideline issued by the commission for the investment of a fraction of the RSA as equity contribution for the purpose of securing residential mortgages