When it comes to accessing your benefits upon retirement, different factors in line with the Pension Reform Act 2014, as well as the rules and regulations guiding the Administration of Retirement and Terminal Benefits issued by the National Pension Commission must be considered.

Let’s take a look at some of them:

• Age: An older retiree will get a slightly higher monthly pension than a younger retiree because his expected life span is shorter

• Gender: The mortality table assumes that women live slightly longer than men.

• Retiree’s choices: Choosing a zero lump sum, maximum lump sum, or lower than the recommended lump sum in the template will affect the monthly pension.

• Size of Annual Total Emolument (ATE): Differences in ATE influences the differences in monthly pension and lumpsum receivable.

• RSA Balance:

• Two retirees with different RSA balances with other variables remaining the same at retirement will result in higher monthly pension and (or) lumpsum for the retiree with higher RSA balance while the reverse is the case for the retiree with the less RSA balance.

• Total monthly contribution is based on individual grade level/ salary structure from the date of employment to date of retirement.

• The growth in the investment income is based on the duration in which the contributions stayed in the RSA.

Understanding grounds for accessing lump sum payment

Temporary job loss or termination

An RSA holder who is less than 50 years of age and has not been in any form of paid/gainful employment for a minimum period of four (4) months after formal exit from employment is qualified to apply for 25% of the balance in his/her Retirement Savings Account in line with the Regulations for the Administration of Retirement and Terminal Benefits. This category of withdrawal can be accessed once as long as the RSA holder is less than 50 years of age.

Voluntary or mandatory retirement

An RSA holder can retire upon attaining the age of 50 years old in the Federal Public Service or Private sector organization and can access a lump sum – the amount payable after sufficient provision have been made to procure a programmed withdrawal or an annuity that will produce an amount that should not be less than 50 percent of his/her annual salary as at the date of retirement.

Retirement due to medical issues

An RSA holder who is retired on medical ground i.e. due to total or permanent disability either of mind or body will qualify to access full retirement benefits not considering his/her age and can also opt for a lump sum payable after sufficient provision have been made to procure a programmed withdrawal or an annuity that will produce an amount that should not be less than 50 percent of his/her annual salary as at the date of retirement.

Pension Enhancement and Revised PW Template

According to the revised PWT which computes the Programmed Withdrawal benefits of retirees, as well as arrears of monthly/quarterly pension payment, the regulatory lump sum value shall be 25 percent of the RSA balance while the minimum pension payout shall be 50% of the final salary of the retiree, subject to the Regulatory lump sum.

For retirees whose RSA balance is not enough to provide 50% of their final salary as pension, after taking the Minimum Regulatory lump sum of 25% of the RSA balance, the PWT would generate the agreed pension that would be less than 50% of the final salary and recommend same for approval.

Find out more about accessing retirement benefits at www.armpension.com or send an email to info@armpension.com