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PENCOM issues guidelines on withdrawals from voluntary contributions

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Pension

The National Pension Commission (PENCOM) this week issued a Circular to all Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) communicating new guidelines on withdrawals from voluntary pension contributions (VC). The new guideline, effective 1 December 2017, mandates compliance with the procedures by all licensed PFAs/PFCs or face sanctions from PENCOM.

The Circular was issued pursuant to the high trend of requests for withdrawals from VCs, usually shortly after contribution. According to PENCOM, this defeats the purpose of VC which is to enhance pension at retirement. It also results in payment of insignificant amount of income tax to tax authorities.

Key highlights of the guidelines are provided below:

  1. Limits to number of withdrawals: Withdrawals from VC account is limited to once every 2 years. Subsequent withdrawals shall also be limited to the incremental contributions from the last approved withdrawal date.
  2. Limits to amount of withdrawals and allocation of VC to retirement benefit: For mandatory contributors, 50% of the VC is available for withdrawal, subject to the limit on number of withdrawals. Taxes would be deducted on incomed earned in line with Section 10(4) of the Pension Reform Act, 2014.
    The remaining 50% is unavailable for withdrawal. It will be re-allocated to the contributor’s retirement benefit and available for use at retirement date.
  3. Restriction on withdrawals by exempted/foreign contributors: The limit on the number of withdrawals described above also applies to exempted/foreign contributors.
    However, exempted/foreign contributors can withdraw all VC amount after 2 years of contribution, subject to deduction of taxes on both income earned and principal amount when withdrawal is less than five years of the contribution.

It is expected that the Circular would curb the high rate of voluntary contribution withdrawals, ensure appropriate tax payments and strengthen the process of voluntary contribution administration. Employers are therefore advised to review the Circular and communicate this to their respective employees to ensure that they are properly guided on the implications of making and withdrawing voluntary pension contributions.

https://nairametrics.com/joint-tax-board-explains-voluntary-pension-contribution/

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Christopher B. Pemu has a degree in Political Science from the University of Lagos. He joined Nairametrics in 2014 as News Editor and later as Managing Editor. He currently serves as the General Manager of Nairametrics. He takes pleasure in traveling, enjoys world politics and in sport, he loves watching football and tennis.

1 Comment

1 Comment

  1. Awe, S. Babatunde

    April 23, 2018 at 6:47 pm

    Is there a minimal amount and tenure for programmed withdrawal….

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Business

Presidency denies building rail line from Nigeria to Niger Republic

The Federal Government has denied plans to construct a rail line stretching from the country into the Niger Republic.

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Fraud, FG

The Presidency has disclosed that the Federal Government is not constructing a rail line from Nigeria linking Kano-Dutse-Maradi into the Niger Republic, as it will only stop at the designated border point.

This follows the public outcry that greeted the Federal Government’s announcement of the rail project.

The disclosure was made by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, through a thread of tweets on his official Twitter handle on Thursday, September 24, 2020.

He revealed that, based on the agreement reached between Nigeria and Niger in 2015 for the Kano-Katsina-Maradi corridor masterplan, the 2 countries agreed to build a rail line to the border town of Maradi.

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In his statement, Garba Shehu said, “Nigeria isn’t building rail line into Niger, but only to the designated Border point. An agreement between Nigeria and Niger in 2015, coordinated by the Nigeria-Niger Joint Commission for Cooperation has a plan for ‘Kano-Katsina-Maradi Corridor Master Plan, (K2M)’ as it is called.

“Going by this, the two nations would each build a rail track to meet at the border town of Maradi. Nigerian delegates to that meeting comprised officials from the Ministry of Foreign Affairs, National Boundaries Commission, Federal Ministry of Industry, Trade & Investment, Ministry of Agriculture and Rural Development, Water Resources as well as those of Kano & Katsina states.”

Going further he said, “The objective of the rail is the harnessing of raw materials, mineral resources, and agricultural produce. When completed, it will serve domestic industries, and play the role of a viable transportation backbone to the West African subregion, starting with the neighboring Niger Republic, for their export and import logistic chain.”

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Nairametrics had earlier reported that the Minister for Transportation, Rotimi Amaechi, after the Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari, announced the approval of the total sum of about $1.9 billion, for the rail line contract and development of Kano-Katsina-Jibia that will terminate at Maradi rail line in the Niger Republic.

According to a media aide to the president, Ajuri Ngelale, the rail line is expected to connect the 3 states of Kano, Katsina, and Jigawa. It moves from Kano to Dambata, Kazaure, Daura, Mashi, Katsina, and terminating in Maradi, Niger Republic.

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Coronavirus

WHO says people with NCDs more vulnerable to severe COVID-19, lists how to prevent it

WHO reveals people with pre-existing Non-Communicable Diseases are more vulnerable to the coronavirus disease.

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WHO is concerned that vaccine hoarding could prolong pandemic, COVID 19: Facebook provides free Ads to help WHO combat Misinformation, COVID 19: Facebook supports WHO, provides free Ads to combat Misinformation, Coronavirus: WHO says Nigeria is among countries with highest cases, WHO warns countries against rushing to lift coronavirus restrictions, Covid-19: WHO lists conditions for relaxing restrictions

The World Health Organization (WHO) has revealed that people with pre-existing Non-Communicable Diseases (NCDs) appear to be more vulnerable to becoming severely ill with the coronavirus disease.

This was disclosed in a statement by the UN health agency on its twitter handle on Thursday, September 24, 2020.

The WHO, in its statement, listed some of those Non-Communicable Diseases to include:

  • Cardiovascular diseases like hypertension, persons who have had and are at risk for a heart attack or stroke
  • Chronic respiratory disease such as chronic obstructive pulmonary disease (COPD), which is a chronic inflammatory living disease that causes obstructed airflow from the lungs
  • Diabetes
  • Cancer

The WHO Director-General, Tedros Adhanom Ghebreyesus, disclosed that the coronavirus outbreak has shown why action on NCDs is important. He acknowledged that people with non-communicable diseases are especially at risk, which is made worse by disruptions to essential services.

He said, “The risk has been compounded by disruptions to essential services including diagnosis and treatment of cancer and diabetes and other non-communicable diseases.”

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He pointed out that the health services gaps are not just in treatment and care, as he said all nations still have much more to do to prevent NCDs. He said that too many people are dying from preventable diseases that are mostly preventable.

The WHO boss revealed that to prevent and control these non-communicable diseases, one has to stop tobacco use, reduce the use of alcohol, cut salt intake, consume less sugar, increase physical activity, eliminate industrial trans-fats, and treat high blood pressure.

He said that all these interventions are part of WHO’s best buys in a set of 16 most attractive ways to save lives and save money.

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Coronavirus

COVID-19 Update in Nigeria

On the 24th of September 2020, 125 new confirmed cases were recorded in Nigeria

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The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 57,849 confirmed cases.

On the 24th of September 2020, 125 new confirmed cases were recorded in Nigeria, having carried out a total daily test of 10,526 samples across the country.

To date, 57,849 cases have been confirmed, 49,098 cases have been discharged and 1,102 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 494,577  tests have been carried out as of September 24th, 2020 compared to 484,051 tests a day earlier.

COVID-19 Case Updates- 24th September 2020,

  • Total Number of Cases – 57,849
  • Total Number Discharged – 49,098
  • Total Deaths – 1,102
  • Total Tests Carried out – 494,577

According to the NCDC, the 125 new cases were reported from 13 states- Lagos (37), Plateau (18), FCT (17), Ogun (15), Rivers (10), Benue (7), Kaduna (7), Anambra (5), Oyo (3), Cross River (2), Ondo (2), Edo (1), Imo (1).

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 19,123, followed by Abuja (5,615), Plateau (3,322), Oyo (3,239), Edo (2,617), Kaduna (2,384), Rivers (2,287), Delta (1,800), Ogun (1,789), Kano (1,734), Ondo (1,608), Enugu (1,285), Ebonyi (1,038), Kwara (1,028), Abia (881), Gombe (857). Katsina (848), Osun (818),  Borno (741), and Bauchi (692).

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Imo State has recorded 566 cases, Benue (480), Nasarawa (449), Bayelsa (397),  Jigawa (322), Ekiti (317), Akwa Ibom (288), Niger (259), Adamawa (237), Anambra (234), Sokoto (161), Taraba (95), Kebbi (93), Cross River (87), Zamfara (78), Yobe (75), while Kogi state has recorded 5 cases only.

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

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The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.

On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.

READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

 

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