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    PenCom grants 25% of RSA for Mortgage purposes

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    By Abdul Lawal

    The National Pension Commission (PenCom) has approved fresh guidelines that will allow holders of Retirement Savings Account (RSA) scheme to access 25 per cent of their contributory balance as equity for residencial purpose.

    Under the guidelines the maximun amount to the withdraw shall be 25 per cent of the total mandatory RSA balance as at the date of application, irrespective of the value of equity contribution required by the mortgage lender.

    This development PenCom said is in line with Section 89(2) of the Pension Reform Act 2014( PRA 2014) which allows RSA holders to use a portion of their RSA balance towards payment of equity for residential mortgage.

    ” Where 25 percent of a contributor’s RSA balance is not sufficient for payment as equity contribution, RSA holders May utilice the contingency portion of their voluntary contributions (if any)”

    According to the Commission, the guidelines on eligibility covered Pension contributors in active employment, either as salaried Employee or as a srlf-employed person.
    PenCom listed the following conditions which must be met by eligible RSA holders.

    • Applicant must have an offer letter for the property duly signed by the property owner and verified by the Mortgage lenders.
    • The RSA of the applicant shall have both emplearán Employee’s mandatory contribution for a cummulative minimum period of 60 months (five years)
    • A contributor under the Micro Pension Plan (MPP) is also eligible ,provided such holder has made contribution for at least 60 months (five years) prior to the date of the holders application.
    • RSA holders that have less than three years to r retirement are not eligible.
    • Married couple, who are RSA holders ,are eligible to make a joint application ,subject to individually satisfying the eligibility requirements.
    • RSA holders, if registered before July 1,2019 ,must have their records updated through the RSA data recapture exercise.
    • Application for equity contribution for residencial mortgage shall be in person and not by proxy.

    The new approved guidelines also stated that to qualify as a Mortgage Lender for this purpose, the company must be licenses by the Central Bank of Nigeria (CBN) and must comply with the Contributory Pension Scheme (CPS) ,

    PenCom said the names of all the eligible mortgage lenders shall be published on its website.

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