PenCom plans use of pension contributions for mortgages

The National Pension Commission on Wednesday said it would soon issue a new guideline that would spell out how contributors under the Contributory Pension Scheme could use their funds to access mortgages.

The Director-General, PenCom, Mrs Chinelo Anohu-Amazu, said this in Abuja while speaking at a stakeholders’ conference on the Pension Reform Act 2014.

The PRA 2014, which repealed the 2004 Act, was signed into law on July 1, 2014 by President Goodluck Jonathan.

Under the old pension law, the Pension Fund Administrators could not directly invest in real estate.

But the PenCom boss said with the new act, the PFAs could now do so, adding that with the development, majority of the over six million contributors can now utilise part of their fund as equity contributions for residential mortgage.

She said, “The most important thing is the allowance of the utilisation of the retirement savings balance for the provision of a primary home.

“For the first time, you are now able, as a contributor, to utilise part of your balances to secure your own primary home in accordance with the guidelines to be issued by the commission.

 “And I think this is fantastic in a country where we have over 15 million housing deficit. At least, those who are contributing over six million under the Contributory Pension Scheme can now, for the first time, be able to utilise rather than just leaving it there.

“The process of issuing these guidelines is already at an advanced stage and it is our expectation that as soon as implemented, this development will assist in bridging the housing deficit in Nigeria.”

The DG said by setting standards, which state governments are required to comply with for the benefit of their employees, the application of the CPS by states and local governments had received a boost under the PRA 2014.

On some of the public sector challenges facing the scheme, she said the workshop would enable relevant government agencies to specifically address them based on the provisions of the law.

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She said, “The new act clearly outlined the responsibilities of other government institutions in the implementation of the CPS.

“Thus, public sector challenges, under the COS, which were encountered during the mast 10 years, in the areas of remittance of pension contributions, funding of the retirement benefits bond redemption fund account, duration and adequacy of monthly pensions for public servant are some of the issues to be specifically addressed.”