Workers no longer have to wait
till retirement before they can
access part of their pension
contributions kept in Retirement
Savings Accounts, NIKE
POPOOLA writes
Before the Pension Reform Act
2004 was amended under the
Contributory Pension Scheme,
many workers were constrained
from having access to the
contributions in their Retirement
Savings Account. They must
either get to retirement age and
exit paid employment or be
sacked from work by their
employers. They were also
required to produce evidence of
forced exit from work to their
Pension Fund Administrators to
apply for 25 per cent of the
balance in their RSA.
Under the new dispensation,
workers now have more access
as they no longer have to
produce evidence of being
sacked before they can access
part of this contribution. The new
Pension Reform Act 2014, which
replaces the PRA 2004 makes
some amendment to allow
workers withdraw from RSA.
PRA 2004 allowed only an
employee that was sacked to
access 25 per cent of his
contributions after waiting for six
months without getting another
job. This posed a lot of
challenges for employees who
were forced to resign by their
employers because they could
not produce evidence of being
sacked to their PFAs, to qualify
them to withdraw from their
savings. Only employees that
were sacked were able to have
this fund.
However, Section 7 (2) under the
PRA 2014 allows a worker who
voluntarily retires, resigns or was
disengaged from employment to
access 25 per cent of his RSA if
he was unable to get another job.
The law also reduced the waiting
period of accessing this fund to
four months. The essence is to
allow the worker to have some
funds to live on or invest in
productive ventures, pending the
time he is able to have a stable
source of income.
Managing Director, Premium
Pension Limited, Mr. Wilson
Ideva, said under the old PRA
2004, it was not possible for the
employee to voluntarily resign
and demand for part of his RSA
contributions.
“But the newly amended act
2014 allows for withdrawal of 25
per cent after four months
without employment whether by
resignation or termination,”
Premium PFA’s boss said.
The Managing Director, NLPC,
PFA, Mr. Wale Kolawole said the
PRA 2014 had amended some
areas in the pension law that
allows contributors to have
access to their funds.
According to him, under the
former law, a worker had to wait
for a minimum of six months if
he was disengaged from service
and had not reach 50 years
before he could apply for part of
his RSA contribution.
“Experience has shown that the
period needs to be shortened, so
in the new Act, it is four months,”
he said.
Another thing the new Act had
also taken care of, he explained
was the issue of the mode of
exit. According to him, the
criterion for 25 per cent
withdrawal was no longer
dependent on if the person
resigned or was sacked, as long
as he was out of work.
“There used to be a contention in
the past. Some employees
complained they were forced to
resign, but documents they had
to produced showed that they
resigned, and this was not
allowed,” he said.
Under the old Act, he noted that
it was assumed that before a
worker could resign, he must
have had something else he
wanted to do if he was not up to
50 years.
“But the new Act has taken care
of that because disengagement is
disengagement, whether you
resigned by yourself or your
employer asked you to go. If you
stay for four months and you
don’t get another employment,
you can approach your PFA to
take 25 per cent of your RSA
account,” he said.
When he eventually retires and is
up to the age of 50, he said, he
can come back when the
appropriate retirement benefit
approach will be applied.
To access 25 per cent of the RSA
contribution, an affected
individual is required to present
some documents to his PFA
which are letter of termination of
appointment issued by the
employer or resignation letter;
last three months’ pays slips;
letter requesting for 25 per cent
payment of RSA balance; and
evidence of accrued pension
rights, if any, for public sector
workers.
Others are bank statement or
letter of introduction from the
bank; proof of age (birth
certificate or sworn declaration of
age); letter from the employer
confirming full remittance of all
contributions made to the RSA for
the private sector worker;
PenCom retiree indemnity form
for public sector workers; four
passport photographs; and a
form to be given by the PFA.

This is good news. Now I can access that my pension fund