You Need N8m In Your Retirement Savings Account To Access Mortgage Finance

For any pension contributor, he or she needs at least N8million in his or her Retirement Savings Account (RSA) to apply for residential mortgage finance through his contributions, BUSINESSDIARY investigation has revealed.

This amount would allow you use 25 per cent of it, amounting to a minimum of N2million to build your dream house.

While those whose employers were consistent in pension contributions and have good salary package, have every reason to rejoice, the same cannot be said of employees who employers failed to contribute regularly to their RSAs and have poor salary package.

it would be recalled that the National Pension Commission(PenCom) commenced the implementation of guidelines on accessing Retirement Savings account (RSA) balance for payment of equity contribution for residential mortgage by pension contributors.

PenCom stated that, the approval was in line with Section 89 (2) of the Pension Reform Act (PRA) 2014, which allows RSA holders to use a portion of their RSA balance towards payment of equity for residential mortgage.

In the guidelines highlighted, it said, the plan covers pension contributors in active employment, either as a salaried employee or as a self-employed person.

According to the Pension Reforms Act (PRA) 2014, an employer is expected to contribute 10 per cent of his employee’s monthly salary and deduct 8 per cent from his worker’s salary as well, making 18 per cent to be remitted into the RSA of the worker by the employer on a monthly basis.

Confirming this development at the 2022 Pension Fund Operators Association of Nigeria(PenOp) Media parley in Lekki, Lagos, at the weekend, the managing director/CEO, Premium Pension Limited (PPL), Mr. Umar Sand Mairami, while reacting on this development, , noted that, the Pension Fund Administrators(PFAs) are partnering some mortgage banks to ensure that contributors benefit from this scheme.

Stating that only 25 per cent of the RSA balance is allowed to be used as equity for the residential mortgage, he noted that, the partnership with mortgage firms will ensure that RSA holders get better rates for this housing scheme.

He expected that, with time, mortgage bankers will compete for better rate, which will lower the rates to be paid on this facility, in the long run.

Earlier, the head, Investment Supervision, National Pension Commission (PenCom), Mr. Ibrahim Kangiwa, while delivering a paper on Mortgage Finance through RSA balance, noted that, the motive of this plan, is to provide housing for first time home owners and improve the standard of living of contributors so that, when they retire, they have a roof on their head.

For successful implementation, he said, stakeholders must work together, adding that, Nigeria is one of the country with the highest housing deficit in the world, a development, he said, the mortgage scheme came to address.

On his part, the executive secretary, Pension Fund Operators Association of Nigeria (PenOp), Mr. Oguche Aguda, noted that, the mortgage scheme is still at its infancy and though, may have few teething challenges, but would be perfected as time goes on, promising that, toperators and the regulator will continue to tweak with the plan to ensure pension contributors get value for their contributions.