NewStats: 3,263,906 , 8,181,833 topics. Date: Sunday, 08 June 2025 at 05:36 PM n3o3k

Opening a pension is now a statutory requirement for all Nigerian employees. Every month, they make a token contribution to the Retirement Savings (RSA) through a Pension Fund (PFA).

One unsung benefit of owning an RSA is that you can borrow from your pension funds when in need. Wondering how that can be done? This article would serve as a guide on how to borrow from your pension fund in Nigeria.

Owning a pension with funds can be a source of help during emergencies. Although there are cons in borrowing this fund, it remains a better option than obtaining a loan from financial institutions.


Conditions for borrowing from your pension fund in Nigeria

To borrow from your pension fund before retirement, you must satisfy one of the three criteria:

1. You must have made additional or voluntary lump sum contributions to your RSA. It is from that money that you can withdraw before retirement.
2. They also allow you to withdraw up to 25% of your retirement fund if under the age of 50. This holds on to the event of losing your job and you cannot secure another within 4 months. The sum is also tax-free.
3. You intend to get a mortgage loan. RSA allows the withdrawal of up to 25% of retirement funds.
Please note that asides from these conditions, the Pension Reform Act of 2014 strictly prohibits withdrawal from your pension .

How to borrow from your pension fund in Nigeria

This depends on your Pension Fund . Different pension fund istrations have different methods and requirements for releasing funds to you. However, the process requires that you approach your PFA with the following documents:

1. Letter of termination of appointment issued by your former employer or letter of resignation.
2. PFA last three months’ payslip.
3. A letter from you requesting a desired percentage of payment from your RSA balance (25% maximum). This could also be a percentage of your voluntary lump sum contribution.
4. Evidence of accrued pension rights if applicable (mostly for public sector workers).
5. Letter of introduction from your bank or bank statement.
6. Proof of age through a birth certificate or sworn declaration of age
7. Letter from your employer which confirms full remittance of all contributions made to your RSA (for private sector workers).
8. PenCom retiree indemnity form if you work in the public sector.
9. A form your PFA would give, and four port photographs.

However, if you intend to obtain a mortgage loan, then you must satisfy the following criteria:

1. You must be in active employment either as a salary earner or self-employed.
2. You must have been contributing consistently to your RSA for the last 10 years.
3. Your debt-to-income ratio shall not be more than 33.33% of your monthly income at the time of application.
4. You must provide all the requested documentation.

The documentation required for a Mortgage loan https://www.loanspot.ng/mortgage-loans/ are:

1. Application letter to access your RSA
2. A mortgage loan offer letter issued by a licensed Primary Mortgage Bank (PMB) or Deposit Money Bank (DMB).
3. Valid copies of documents to the property on which the mortgage loan was granted
4. A letter of confirmation issued by the PMB or DMB to your PFA to attest to the authenticity of the mortgage transaction. They must sign this letter by at least two directors of the bank, along with an official stamp or seal.
Check out: ARM Pension Loan

Conclusion

Although with restrictions, RSA allows you to borrow money under certain conditions. Under the right conditions, you can borrow to obtain a property asset or meet other needs. Such money can even be used to fund your business on retirement or invested in something else.

Check out the Related Posts below:

ARM Pension Loan: https://www.loanspot.ng/arm-pension-loan/
4 Ways to Build Your Emergency Fund: https://www.loanspot.ng/how-to-build-an-emergency-fund/
Student Loan Trust Fund - Apply for a student loan with ease. https://www.loanspot.ng/student-loan-trust-fund/
How to Know if Your BVN is Blacklisted in Nigeria. https://www.loanspot.ng/how-to-know-if-your-bvn-is-blacklisted-in-nigeria/

Good afternoon, please what are the requirements if one wants to access the 25% voluntary contribution and is it 3 months or 4 months.

2special:
Good afternoon, please what are the requirements if one wants to access the 25% voluntary contribution and is it 3 months or 4 months.

Scam bro , run away ... he's a phising scammer

Makamatic:


Scam bro , run away ... he's a phising scammer

oh