Low-Income Earners Can Withdraw Total Retirement Savings – PenCom
Written by Olakunle Oke on December 3, 2024
The National Pension Commission (PenCom) has announced that low-income earners can withdraw their total retirement savings, following the recent amendment to the Pension Reform Act 2014.
According to PenCom, the amendment allows low-income earners, who are classified as those earning a monthly income of N30,000 or less, to withdraw their entire retirement savings upon retirement. This decision aims to alleviate poverty and provide financial relief to low-income earners in their retirement.
Prior to the amendment, low-income earners were required to use a portion of their retirement savings to purchase an annuity or programmed withdrawal, which would provide them with a steady income stream in retirement.
PenCom stated that the amendment is expected to benefit a significant number of low-income earners, who may not have had access to a steady income stream in retirement. The commission also emphasized that the amendment is in line with the federal government’s efforts to reduce poverty and promote financial inclusion.
Key Highlights of the Amendment
1. Low-income earners can withdraw total retirement savings: Those earning a monthly income of N30,000 or less can withdraw their entire retirement savings upon retirement.
2. Relief for low-income earners: The amendment aims to alleviate poverty and provide financial relief to low-income earners in their retirement.
3. No requirement for annuity or programmed withdrawal: Low-income earners are no longer required to use a portion of their retirement savings to purchase an annuity or programmed withdrawal.
Conclusion
The amendment to the Pension Reform Act 2014 is a welcome development for low-income earners, who can now withdraw their total retirement savings upon retirement. This decision is expected to provide financial relief and alleviate poverty among low-income earners in their retirement.
