Highlights on the Guidelines for withdrawals from Voluntary Contributions From PENCOM, Nigeria.

Dear Esteemed Client, The National Pension Commission on the 16th of November 2017 released a circular on withdrawal of Voluntary Contribution effective 1st December 2017. The salient points in this circular are: You may continue to make voluntary contributions to your retirement savings account (RSA) However, your voluntary contribution withdrawals will now be once every two (2) years from your last approved withdrawal date. Your subsequent withdrawals will be on incremental voluntary contributions to your RSA after your last approved withdrawal date.  If you are covered under the Contributory Pension Scheme (Mandatory Contributors), note that 50%   of the amount you remit as voluntary contribution shall be treated as contingent available for withdrawal every two years from your last approved withdrawal date. Tax will be deducted only on income earned. The balance of 50% shall be fixed for pension to be utilized at the date of retirement to augment contributor’s retirement benefit.  For exempted retirees and foreigners, withdrawal shall be every two years but subject to deduction of taxes on both income and principal when withdrawal is less than five years of contribution.  Note that if you make any single remittance of N5million and above as voluntary contribution, the PFAs/PFCs are under obligation to report this single remittance to the Economic and Financial Crimes Commission (EFCC) in line with sections 1 and 10 of the Money Laundering (Prohibition) Act 2011. As your PFA, we will ensure that all taxes deducted from voluntary contribution withdrawals are remitted to the appropriate tax authority within 21days after the end of the month of withdrawal of the Voluntary Contribution. Consequently, you would be require to provide your TIN when applying for your voluntary contribution as tax will be remitted to your state of residence.