Four years after the Pension Reform Act was amended, workers have been unable to use part of the savings in their Retirement Savings Accounts for mortgage loans.
Findings by our correspondent revealed that the guidelines for the withdrawal of 25 per cent of the RSA balance by any contributor towards securing a mortgage loan to own a primary home were still being worked upon by the National Pension Commission.
“Upon conclusion of all the required processes, including stakeholder consultations and securing necessary approvals, the commission will issue the guidelines accordingly,” PenCom had said.
In 2015, the commission released draft guidelines on withdrawals from the RSA towards equity contribution for payment of residential mortgage.
According to the draft guidelines, such workers may however forfeit the lump sum payment but will only be entitled to monthly pension payments when they retire.
Section 3.5 of the draft guidelines states that an eligible RSA holder can access a maximum of 25 per cent of the RSA balance as equity contribution for a mortgage loan.
Section 3.4 also states that a RSA holder that has utilised a portion of the RSA balance as equity contribution for residential mortgage may not be entitled to a lump sum payment at retirement.
According to Section 89 (2) of the Pension Reform Act 2014, a Pension Fund Administrator may, subject to guidelines issued by PenCom, apply a percentage of pension fund assets in the RSA towards payment of equity contribution for payment of residential mortgage by a holder of RSA.