PenCom, PenOp stipulate conditions for accessing residential mortgage fund

The National Pension Commission (PenCom) and Pension Operators Association of Nigeria (PenOp) have stipulated conditions for the Retirement Savings Account holders to access their equity contributions for the acquisition of residential mortgage funds.

In a seminar organized by PenOp for pension Editors in Lagos on the theme: “Pension: an opportunity to own your own home, an x-ray of the new RSA plan on home ownership,” explained the outline for RSA holders to access their balance for mortgage acquisition.

The Head of Investment Department, PenCom, Ibrahim Kangiwa, who presented the theme paper said for contributors under the Contributory Pension Scheme (CPS) to be eligible to use their RSA balance for acquisition of residential mortgages, he must have contributed for five years (60 months) cumulative of employer and employee’s mandatory contributions.

According to him, the same thing was applicable to the contributors under the Micro Pension Plan (MPP), adding that married couples, who individually met the eligibility criteria, were also eligible.

On authorised limit for equity contribution that qualifies a contributor, Kangiwa put the maximum allowed at 25 per cent of the RSA balance, noting that “where 25 per cent of RSA balance is more than equity contribution, the RSA holder can only access the amount equivalent to equity contribution required.

He said, “Where 25 per cent is not sufficient for equity contribution, RSA holder may utilise Voluntary Contribution (VC) in line with the Voluntary Contribution guidelines.

“Where 25 per cent is not sufficient for equity contribution, Micro Pension (MP) contributor may utilise contingency portion in line with MP guidelines.

“Where 25 per cent is insufficient as equity contribution, RSA holder shall deposit the difference with the mortgage lender,” Kangiwa explained.

Those exempted from this initiative, according to Kangiwa, include RSA holders that have less than three years to retirement; existing retirees on CPS; exempted persons under the PRA 2014 and RSA holders who do not have both employer and employee’s mandatory contributions for a cumulative minimum period of 60 months.

He said that equity contribution was not for refinancing existing mortgage, outright purchase of property and purchase of land, noting that the property shall be for residential purpose only.

Kangiwa said the objective of the initiative was to provide housing for first time home owners and improve the standard of living of RSA holders under the CPS by facilitating their ownership of residential homes during their working life.

Earlier in his remarks, the President, PenOp/Managing Director, Stanbic IBTC Pension Managers, Olumide Oyetan, emphasised the need for stakeholders to work together to ensure the successful implementation the guidelines.

He said the successful implementation of this initiative would improve people’s welfare and move the country forward.

Meanwhile the Managing Director/CEO, First Pension Custodian, Oloruntimilehin George, said the pension fund assets under the Contributory Pension Scheme (CPS) has the potential to grow to N14.8 trillion by the end of 2022.

He made this known at the 2022 media parley in Lagos that the expected rise was certain given prudent investment made with the fund which industry believe will scale up the fund from N14.6 trillion at the end of October 2022 to N14.8 trillion by the end of December, 2022.

In his welcome speech, the Head of Media Branding and Communication, PenOp, Lanre Idris, said the annual media parley was another opportunity for the industry to engage with the media, to share a number of our wins and challenges within the pension industry, to provide an opportunity for operators, regulators and the media to engage and ensure we create a growing community of champions for the pension industry reforms and the work that is going on within the industry.

According to Idris who is the Managing Director/CEO, Leadway Pensure Limited, as an industry, he said, we value the role of the media very much and we hold you all in high esteem.

“This event provides another opportunity for us to commend you all for the work that you have done and to ask you to do even more in the coming years”.

He called for constant education of the general public by media.
Said he, “Distinguished ladies and gentlemen, you will agree with me that we all need to do more to educate the public on the workings and the gains of the Contributory Pension Scheme.

“We need to do more to protect the gains of the scheme from personal and narrow interests and we need to do more to ensure that the benefit of the pension reform positively affects every home in Nigeria.

“At this juncture, I would like to reiterate that you the media, are a very critical stakeholder in achieving these goals for the industry.

“Having said this, we would like to say that this day is also a day to hear from you. We want to hear from you in terms of how we can serve you better and how we can collaborate more for the overall benefit of the retirees, the pensioners and the industry as a whole,” he added.