Pension Act Amendment: Senate targets 75 per cent access to savings by pensioners

Retirees from public and private service with pension savings account are about to get a new deal, accessing their retirement funds with various pension mangers as the Senate prepare to consider amendment of the Pension Reform Act 2004.

The new and maybe better deal would emanate from the bill before the Senate to amend the Pension Reform Act 2004 to grant retirees access to 75% of their pension savings.

The bill was sponsored by the Senator Aliyu Magatakarda Wamakko representing Sokoto North.

Wamakko in his explanatory memorandum said the bill sought to provide succour to delay and other difficulties pensioners encounter in withdrawing their savings from retirement savings accounts.

According to the National Assembly Journal, the bill sought the amendment of section 7a of the Principal Act to read that the bill will give “up to 75 per cent” immediately after the words: “a lump sum” which leaves them to the discretion of the pension managers to decide what lump sum means, which may not be adequate for their need for use.

Many retirees or disengaged employees have been frustrated while they sought to access their retirement savings when they need them funds for use.

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Section 7(1) of the Pension Reform Act 2014 states that “a holder of a retirement savings account shall upon retirement or attaining the age of 50 whichever is later, utilise the amount credited to his account for the following benefits.

The Act bars retirees or disengaged employees under the age of 50 from accessing any portion of his retirement savings account in section 16 and reads: “An employee shall not be entitled to make any withdrawal from his retirement savings account opened under section 11(1) of this Act, before attaining the age of 50 years.

“Withdraw a lump sum from the total amount credited to his retirement savings account provided that the amount left after the lump sum withdrawal shall be sufficient to procure a programmed fund withdrawal or annuity for life in accordance with extant guidelines issued by the commission from time to time.”

Another provision of the Act in section 7 limited the access of disengaged public servant this: “Where an employee voluntarily retires, disengages or is disengaged from employment, as provided for under section 16(2 and 5) of this Act, the employee may with the approval of the commission, withdraw an amount of money not exceeding 25 per cent of the total amount credited to his retirement savings account, provided that such amount shall not only be made after four months of such retirement or cessation of the employment and the employee does not secure another employment.”