House of Representatives has set in motion machinery to ensure that workers on contributory pension scheme can access a minimum of 50 percent of the credit balance on their Retirement Savings Accounts (RSA), irrespective of the age at which they retire, or are disengaged.
A bill seeking amendment to the Pension Reform Act, 2014 successfully scaled second reading yesterday after the lawmakers noted that attainment of 50 years of age before access to the funds as contained in the extant law was no longer a realistic idea.
The extant Act provides that a disengaged employee can only access 25 percent of the credit on his or her RSA, while the balance of 75 percent and accrued interests can only be accessed on the attainment of 50 years of age, with an amount expected to be retained to secure a projected lifetime annuity for the person.
According to the sponsor of the bill, Denis Amadi, the amendment was mainly about procedures and amounts receivable as benefit to persons who resigned their employment, or have been disengaged before attaining 50 years, as presently provided for in the PENCOM Act.
He said: “The proposed amendment strongly advocates for immediate and unrestricted 50 percent bulk withdrawal of the amount standing to the credit on such person’s RSA.
“Presently, thousands of young persons between the ages of 30 to 40 years have been disengaged from various employments with millions standing to their credits, but yet living in abject poverty because they could not access their funds.
“With the proposed amendment, the over 300,000 of such retirees or disengaged workers will have the opportunity to raise owner equity for micro and small enterprises, as such facilities were not easily accessible through the banks and related institutions.
“At 50 years, most of these disengaged employees would have died due to long economic helplessness and hopelessness. Those who would not die could hardly be active enough to start new ventures and nurture same into stability”.
The bill was referred to Committee on Pension Matters for further legislative action after it was put to a voice vote by Speaker Yakubu Dogara.