How workers can access voluntary contributions, by PenOp

Workers contributing additional funds into their Retirement Savings Accounts can withdraw half of the voluntary contributions every two years.

The Pension Funds Operators Association of Nigeria said this in a presentation to create pension awareness.

It stated, “You are entitled to withdraw up to 50 per cent from your additional voluntary contributions once every two years.

“When you need money, you are allowed to take from your voluntary contributions.”

According to the guidelines of the National Pension Commission, the Pension Reform Act 2014 allows employees to make voluntary contributions into their Retirement Savings Account, in addition to their mandatory pension contributions, with the sole aim of enhancing their retirement benefits.

“Voluntary contributions under these guidelines shall be non-obligatory contributions made by any employee in the formal sector through the employer,” it stated.

The commission stated that employees of organisations with less than three employees as well as self-employed persons as provided in Section 2 (3) of Pension Reform Act 2014 (PRA 2014) should be covered under the guidelines for micro pensions.

It stated that part of the objectives was: “To establish uniform set of rules for the operation of voluntary contributions and eligibility criteria for participation in voluntary contributions;

“To provide the procedure for making voluntary contributions, provide necessary safeguards and modalities for its withdrawals;

“To utilise voluntary contributions for the purpose of enhancing future retirement benefits for active or mandatory contributors.”

It added that it aimed to encourage retirees under Contributory Pension Scheme to utilise part or all of the voluntary contributions to augment their existing pension.

According to the commission, all eligible contributors desirous of making additional voluntary contributions should maintain their existing RSAs, while the new contributors should open RSA with any Pension Fund Administrator of their choice, into which their contributions should be remitted as voluntary contributions.

It stated that any eligible contributor under the guidelines should notify their employer in writing of his intention to make voluntary contributions and the amount to be deducted from his emoluments and remitted as voluntary contributions.

The commission added that voluntary contributions should be made from the employee’s legitimate income.

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