Tuesday, October 7, 2025
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HIGHLIGHTS OF GUIDELINES ON ACCESSING RSA BALANCE TOWARDS PAYMENT OF EQUITY CONTRIBUTION FOR RESIDENTIAL MORTGAGE BY RSA HOLDERS

By Ibrahim Kangiwa

Head of Investment

National Pension Commission (PenCom)

  • Housing Finance Continues to be a Challenge in Nigeria

*Percentage of Home Ownership

Nigeria – 25%

Kenya – 75%

South Africa – 56%

  • Various Interventions / Initiatives aimed at the Nigerian Housing Market
  • Nigerian Housing Finance Program – NMRC, NMGC
  • Family Homes Fund, FMBN

 

The journey to the release of the Guidelines started over 8 years ago before the passage of the Pension Reform Act (PRA) 2014.

The National Pension Commission’s Corporate Strategy 2015 – 2019 had as one of its main focus areas to “…Deliver Measurable Impact on the Nigerian Economy…”

The Commission had explored a number of options that would enable it deliver ‘measurable impact in the economy, especially focusing on Infrastructure and Housing

Identification of Equity Contribution as one of the major challenges to Housing Finance (Mortgage Generation)

Section 89 (2) of the Pension Reform Act (PRA) 2014 allows RSA holders to apply a percentage of their Retirement Savings Account (RSA) balances as equity contribution for residential mortgage subject to Guidelines issued by the Commission.

 

Objective

  • Provide access to equity finance for RSA holders in the Contributory Pension Scheme (CPS).
  • Improve the standard of living of RSA holders under the CPS by facilitating their ownership of residential homes during their working life.
  • Improve enrolment in the CPS by providing incentives to employees who are yet to open RSAs.
  • Provide a sustainable source of long-term finance to the mortgage sector and spur development in the housing sector.

 

Coverage

  • Employees in active service or self-employed persons who are making monthly/periodic contributions to either of the following RSA Funds:
  • Funds I
  • Fund II
  • Fund III
  • Fund V
  • Fund VI Active

 

Exemptions

  • RSA Holders that have less than 3 years to retirement.
  • Existing Retirees on CPS.
  • Exempted persons under the PRA 2014.
  • RSA holders who do not have both employer and employee’s mandatory contributions for a cumulative minimum period of 60 months.

 

Clarifications on Use of Equity Contributions

  • Equity contribution is not for refinancing existing mortgage.
  • Not for outright purchase of property.
  • Not for purchase of land.
  • The property shall be for residential purpose only.

 

Conclusion

The objective is to provide Housing for first time home owners and improve the standard of living of RSA holders under the CPS by facilitating their ownership of residential homes during their working life.

For successful implementation, Stakeholders must work together to ensure effective implementation of the Guidelines.

Employers should ensure that contributions are deducted and remitted on time as required by law

Parties should ensure due diligence checks to preserve the integrity of the process.

 

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