Home Business & Economy Low-Income Earners Can Withdraw Total Retirement Savings — PENCOM.

Low-Income Earners Can Withdraw Total Retirement Savings — PENCOM.

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The National Pension Commission (PENCOM) has announced a significant update for low-income earners in the Micro Pension Plan (MPP). Participants in the scheme can now withdraw their entire retirement savings upon retirement or when they can no longer actively contribute. This initiative is aimed at promoting financial inclusion and encouraging informal sector workers to join the pension system, thereby enhancing their financial security in old age.

The MPP, introduced by PENCOM, is designed to cater to workers in the informal sector and small business owners who are often excluded from the formal pension system. With this new guideline, contributors who find it difficult to save consistently or meet long-term contribution requirements can still benefit fully from their accumulated savings. This move is expected to motivate more people in the informal economy to participate in the scheme.

PENCOM DG, Omolola Bridget-Oloworaran

According to PENCOM, the decision to allow full withdrawals aligns with its goal of providing a flexible and accessible pension system. The commission noted that many informal sector workers face irregular income streams, making it challenging to commit to traditional pension plans. By offering the option of total savings withdrawal, PENCOM hopes to address these challenges and ensure that contributors can still access their funds when they need them the most.

The Micro Pension Plan has seen gradual adoption since its launch, but experts have often cited a lack of awareness and rigid withdrawal processes as barriers to widespread participation. PENCOM’s new policy is expected to address these concerns and boost confidence in the scheme. Additionally, the commission has intensified efforts to create more awareness about the benefits of the MPP, including retirement security and access to funds during emergencies.

This development marks a step forward in Nigeria’s pension sector, particularly for low-income earners who are often financially vulnerable. By making the scheme more accommodating, PENCOM aims to strengthen social safety nets and reduce poverty among retirees in the informal sector. Stakeholders have commended the initiative as a practical approach to fostering a more inclusive pension system in the country.

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