Contributors under the Contributory Pension Scheme are entitled to withdraw portions of the balance in their Retirement Savings Accounts (RSAs) six times from the commencement of contributions to retirement.

As provided in the Pension Reform Act 2004 and the 2014 amendment, RSA holders can access 25 percent of their pension savings if they lose their jobs and remain jobless four months after.

According to the Act, where an employee voluntarily retires, disengages or is disengaged from employment as provided for under Section 16(2) and (5) of this Act, the employee may with approval of the National Pension Commission (PenCom), withdraw an amount of money not exceeding 25 percent of the total amount credited to his retirement savings account, provided that such withdrawal shall only be made after four months of such retirement or cessation of employment and the employee does not secure another employment.

The second time RSA holders can access their savings is when they decide to use part of their savings as equity for residential mortgage.

PenCom, as provided in the law, 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.

According to the commission, the approval is in line with Section 89 (2) of the Pension Reform Act 2014, which allows RSA holders to use a portion of their RSA balance towards payment of equity for residential mortgage.

The third time RSA holders can access their funds is when they chose to do voluntary contributions (VC); they are entitled to make withdrawal at intervals.

VC is an optional contribution made above the mandatory 18 percent employer and employee contributions into an individual’s RSA.

The law permits you to access 50 percent of VCs for withdrawal once in two years.

The fourth time is in the event of the death of the RSA holder or when declared missing and presumed dead.

In this case, the balance in the RSA will be paid to the named beneficiaries. Where an employee who has been contributing under the new pension scheme dies before his/her retirement, his retirement benefits shall be paid to his beneficiary under a will or Admitted to Probate or court order by the court of competent jurisdiction to receive the death benefits of an RSA holder who died intestate.

When an employee is missing and not found within a period of one year, he or she may be presumed dead by a board of inquiry constituted by the commission.

However, the Pension Reform Act provides for group life insurance by the employer for the employee in the event of death.

This is a life insurance policy maintained by an employer in favour of the employees. The benefit, which is a minimum of three times the annual total emolument of the employee, is paid to the named beneficiary (ies) of a deceased person who died in service.

The fifth time is at the time of retirement, where the RSA holder is entitled to a lump sum. The lump sum here represents the initial withdrawal by a retiree from his or her RSA balance at the point of leaving employment, in either the public service or the private sector.

Read also: These five PFAs control 56% of pension enrolment

The sixth and final stage is the payment of pensions to the RSA holder, who has contributed through the employer-employee arrangement and managed by the Pension Fund Administrator (PFA).

As stipulated in Section 7(1) of the PRA 2014, a holder of RSA shall, upon retirement or attain the age of 50 years, whichever is later, utilise the amount credited to his retirement savings account to procure a programmed withdrawal or annuity for life in accordance with guidelines issued by the commission.

While the programmed monthly or quarterly withdrawals managed by the PFAs are calculated based on expected life span, annuity for life, on the other hand, is purchased from a life insurance company with monthly or quarterly payments in line with the jointly issued guidelines by PenCom and the National Insurance Commission.

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