Updates on withdrawal of Voluntary Contribution

By November 16, 2017 No Comments

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 VC withdrawals will now be once every two (2) years from your last approved withdrawal date;
  • Also your subsequent withdrawals will be on incremental voluntary contributions you make 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 VC shall be treated as contingent available for withdrawal every two years from your last approved withdrawal date and tax will be deducted only on income earned.
  • The balance of 50% shall be fixed for pension to be utilized upon your retirement.
  • For exempted retirees and foreigners, withdrawal shall be every two years but subject to deduction of taxes on both income and principal.
  • Note that if you make any single remittance above 5 Million Naira as VC we will be under obligation to report this single remittance to the Economic and Financial Crimes Commission in line with sections 1 and 10 of the Money Laundering (Prohibition) Act 2011.
  • Also as your PFA, we will ensure that all taxes deducted from VC withdrawal is remitted to the appropriate tax authority within 21days after the end of the month of withdrawal of the Voluntary Contribution. To enable us do this, ensure you provide us with your TIN when applying for your VC as tax will be remitted to your state of residence.