The Nigerian government has announced that low-income earners can withdraw their entire retirement savings from their pension accounts, pending the approval of the Minimum Pension Guarantee. This decision was revealed in a recent memo from the National Pension Commission (PenCom), signed by A.M. Salem, Head of the Surveillance Department.
Under the new amendment, retirees receiving monthly or quarterly pensions of N23,333.33—equivalent to one-third of the new N70,000 minimum wage—are now permitted to withdraw their total pension savings. This change follows the introduction of Section 4.1(g) in the revised regulation on the administration of retirement and terminal benefits, which aligns with the increased minimum wage of N70,000.
Previously, retirees were only allowed to withdraw one-third of their total Retirement Savings Accounts (RSAs). The memo, which was addressed to pension fund administrators and custodians, referenced the signing of the National Minimum Wage Bill into law by President Bola Tinubu on July 29, 2024. The new law raised the national minimum wage from N30,000 to N70,000.
According to the revised regulation, if a retiree’s RSA balance is insufficient to provide a monthly or quarterly pension of at least one-third of the minimum wage (N23,333.33), they are now allowed to withdraw the entire balance of their RSA.
PenCom has directed pension fund administrators to use the N70,000 minimum wage when processing retirement benefits in accordance with Section 4.1(g) of the regulation. Retirees whose pensions fall below the threshold of N23,333.33 can now choose between withdrawing their remaining RSA balance in full or continuing to receive their current pension payments until the Minimum Pension Guarantee is implemented.
