The National Pension Commission (PenCom) 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.
This was made known today in a statement released by the Commission.
According to the Commission’s Director General, Aisha Dahi-Dahir-Umar, the approval 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.
She said highlights of the guidelines are that the contributor must be in active service, couples can make a joint application, among others.
To be eligible, she said: “The guidelines cover pension contributors in active employment, either as a salaried employee or as a self-employed person. Interested RSA holders or applicants must meet conditions such as – have an offer letter for the property duly signed by the property owner and verified by the mortgage lender; and RSA of the applicant shall have both employer and employee’s mandatory contributions for a cumulative minimum period of 60 months (five years.
“A contributor under the Micro Pension Plan (MPP) is also eligible, provided he or she has made contributions for at least 60 months (five years) prior to the date of his or her application; and RSA holders that have less than three years to retirement are not eligible. Married couples, who are RSA holders, are eligible to make a joint application, subject to individually satisfying the eligibility requirements. Also, RSA holders, if registered before July 1,2019 must have their records updated through the RSA data recapture exercise; and application for equity contribution for residential mortgage shall be in person and not by proxy”.
“The maximum amount to be withdrawn shall be 25 per cent of the total mandatory RSA balance as at the date of application, irrespective of the value of equity contribution required by the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. Where 25 per cent of a contributor’s RSA balance is not sufficient for payment as equity contribution, RSA holders may utilise the contingency portion of their voluntary contributions if any.
“For mortgage lender to be qualified, the company must be licensed by the Central Bank of Nigeria (CBN), comply with the CPS and have valid Pension Clearance Certificate (PCC). The Commission will publish names of the eligible mortgage lenders on its website and invites interested RSA holders to contact their PFAs for more information and guidance”, she added.