How To Borrow From Your Pension Fund In Nigeria
How To Borrow From Your Pension Fund In Nigeria. Get All The Information You Need On Pension Fund. Check This Post Now.
Are you looking for steps to borrow money from your pension account? Have you been searching for ways to borrow from your pension fund? Then this article is for you, as this article is all about how to borrow from your pension fund. But before we go into full details, we need to have a better understanding of what a pension account is all about.
What Is A Pension Account?
A Pension Account is a plan that sets aside money to be spent after retirement. It is currently a requirement for all employees in Nigeria.
Steps On How To Borrow Money From Your Pension Fund
The ability for workers to borrow some amount of funds from their pension funds whenever necessary is one benefit of having a Retirement Savings Account. In this article, we will be serving you on ways you can adopt on how you can borrow from your pension fund in Nigeria. You need the following documents are required before you can borrow from your pension fund in Nigeria;
- Letter Of Termination Of Appointment
- Three Months Pay-slip
- Letter Requesting Your Payment
- Evidence Of Accrued Pension Rights
- Letter Of Introduction From Your Bank
- Proof Of Age
- Letter From Your Employer
- Pencom Retiree Indemnity Form
- Your Pension Fund Administrator’s Form
- Passport Photographs
How To Borrow From Your Pension Fund In Nigeria
1. Letter Of Termination Of Appointment
The first and very important criteria needed before you demand a loan from your pension fund is having a letter of termination of employment, this is given to you by your previous employer. Another document you can substitute with this document is letter of resignation, just in case.
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2. Three Months Pay slip
The next requirement you need before you request to borrow from your pension fund is a three months pay-slip from your pension fund administrator. This pay-slip must be with you before you demand the loan.
3. Letter Requesting Your Payment
There is no way you are heading to your pension administrator for loan without having in handy a written letter from you, requesting a percentage from your pension fund. You should also note that this pension you are requesting could also be part of your contribution too.
4. Evidence Of Accrued Pension Rights
Just in case you work in the public sector, you will be needing an evidence of accrued pension rights as one of the requirements needed.
5. Letter Of Introduction From Your Bank
If you want to borrow money from your pension fund, you will need to provide a letter of introduction from your bank, as this is the next document required of you. You can obtain this document from any commercial bank you use or where you conduct business.
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6. Proof Of Age
An original birth certificate or sworn declaration of age is needed for this assignment too, as you will need to provide this document before you can borrow from your pension fund.
7. Letter From Your Employer
You will also be required to get from your present employer that will confirm the full reimbursement of all contributions you made to your Retirement Savings Account if you are looking to borrow from your pension fund. Only private organizations demand this letter from the employer.
8. Pencom Retiree Indemnity Form
People who work for the government and they eventually want to borrow from their pension fund needs this important document as you need to have a PenCom retiree indemnity form. It is very important too.
9. Your Pension Fund Administrator’s Form
Another step to borrowing from your pension fund is this form. You would also need this form and it is your pension fund administrator that will give you. This is a crucial and important phase too.
10. Passport Photographs
Last on our list is the passport photographs, this is very crucial as you will be needing your recent photographs to show, this is one of the most needed requirements before you can borrow from your pension fund.
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Conclusions
There are so many reasons as to why you choose to borrow from your pension fund, could be that you want to buy a house, land or even build a beautiful house from scratch, whichever one it is, you just need to adopt the steps highlighted above, as this will guide you on this mission.
Frequently Asked Questions
1. Can I Close My Pension And Take The Money Out?
You can take up to 25% of the money built up in your pension as a tax-free lump sum.
2. Can I Cash In My Pension At 32
Typically, you can not withdraw from your pension before the age of 55. But, withdrawal exceptions depend on your health and pension scheme.
3. How Long Does It Take To Withdraw Money From Your Pension?
Depending on your pension provider, it should take around four to five weeks from the date you requested to withdraw your lump sum.
4. Can I Borrow From My IBTC Pension Account?
It may seem impossible but you can take out a loan from your pension account when you are out of jobs.
5. How Can I Access My Pension Early?
If you are over 55 you can access your pension in the normal way but if you are under 55, you can only unlock your pot early for two reasons: You are too ill to work, or you have a terminal illness and less than a year to live.
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