PenCom Cautions Contributors against huge withdrawals

The National Pension Commission (PenCom) has advised contributors into the contributory pension scheme (CPS) to avoid the habit of demanding a huge payment from their Retirement Savings Account (RSA).

The commission, which gave the advice at the Annual General Meeting of the National Association of Insurance and Pension Correspondents (NAIPCO) held in Lagos, said such action could have a significant impact on their retirement savings, thereby reducing what they could be taking home on monthly basis.

Head, Research &Corporate Strategy Department of the Commission, Mr. Umaru Farouk Aminu, who gave the advice expressed the regret that perhaps due to ignorance, most contributors often demand for huge sum of initial payment  adding that when such is granted, it reduced their monthly pay which has seen many of them grumbling.

Advising contributors against this, Aminu said: "As a contributor to the Scheme, when you retire, you don’t have to take a huge initial lump sum from your Retirement Savings Account, RSA.

Accordingly, you are advised to take less lump sum except if there is need to do otherwise, because the less lump sum you take, the more money you get as monthly retirement benefit.”

He insisted that retirees should take less lump sum payout if they don’t have need for it, adding that less lump-sum will help them keep more money in the Retirement Savings Account (RSA).