PenCom issues guidelines on withdrawals from retirement account for mortgage payment

The National Pension Commission (PenCom) has announced guidelines on withdrawals from Retirement Saving Accounts (RSA) for residential mortgage payment.

These guidelines are contained in a document issued by the PenCom last week. In the 2014 Pension Reform Act, the commission had made provision for  Retirement Saving Accounts (RSA) holders to access part of their pension contribution for mortgaged financing.

“Section 89 (2) of the Pension Reform Act 2014 provides that a Pension Fund Administrator may, subject to guidelines issued by PenCom, apply for a percentage of pension fund assets in the RSA.

According to PenCom, the guidelines are designed to put in place measures that will allow contributors access a portion of their pension savings for payment of equity contributions in procuring first-time residential mortgages.

“In pursuant to the referenced Section 89(2), the guidelines provide the framework for the implementation of the section. It seeks to provide the operational modalities for pension fund administrators.”

The guidelines help to determine the eligibility requirements, procedures and documentation required to enable RSA contributors to access and utilise part of their RSA balances.

PenCom urged stakeholders to forward their feedback, comments and enquiries about the draft guidelines to Director-General of the commission on or before the close of business on Sept 11.