New guidelines for voluntary pension contributions
The National Pension Commission (PenCom) has issued new guidelines to regulate the operation of Voluntary Pension Contributions (VPC) under the Contributory Pension Scheme (CPI).
PenCom Head of Corporate Communications, Mr Peter Aghahowa, said that under the guidelines, voluntary contributions should be non-obligatory contributions made by any employee in the formal sector through the employer.
The Pension Reform Act (PRA) 2014 allows employees to make voluntary contributions into their Retirement Savings Account (RSA) in addition to their mandatory pension contributions to enhance their retirement benefits.
Aghahowa said the objective of the guidelines was to establish uniform set of rules for the operation of VPC and eligibility criteria for participation in the contributions.
He said the guidelines were meant to provide the procedure for making voluntary pension contributions as well as necessary safeguards and modalities for withdrawals.
Aghahowa said another objective of the guidelines was to use voluntary pension contributions for the purpose of enhancing future retirement benefits for active or mandatory contributors.
He said the guideline was to encourage retirees under CPS to utilise part or all of the voluntary contributions to augment their existing pension.
The PenCom spokesperson said the voluntary pension contribution would assist retirees under defunct Defined Benefit Scheme (DBS), exempted persons from the CPS and foreigners to save in order to cater for their livelihood during old age.
“The commission hereby reminds contributors to be guided by the guidelines and encourage them to direct all their inquiries pertaining the voluntary pension contributions to their respective Pension Fund Administrators (PFA),’’ Aghahowa said.