It happens sometimes that people start to think about pension withdrawal quite early, under the pressure of circumstances. In such cases, they need professional guidance to help them do it wisely without ruining their future.
Some essential pension withdrawal guidelines from Stanbic
In compliance with the law, Nigerians are free to collect a certain amount of money from their retirement savings even before they retire. However, it’s not that simple and not always allowed. Let’s find out what is recommended by retirement benefit managers from Stanbic IBTC.
- Does a person have the access to the funds saved for retirement time before the retirement comes?
In general, the savings Nigerian people have for their retirement period are supposed to stay untouched up to the moment the person reaches the official retirement age for their specific profession. This is simply reasonable because these savings are made to provide a person with money when he or she is no longer able to work and earn. However, there are situations when a person can reach this money even before the retirement happens.
You can take some money from your retirement savings in case you have lost your job for certain reasons and have not found any new one within 4 months. In this situation, you are allowed to reach the retirement savings and take from them, but no more than 25% and only once. The remaining amount will be accessible when you turn 50 or when you retire, whichever of these two happens first.
- Is a person able to withdraw the entire amount of pension savings when the due moment comes?
A person is able to withdraw no more than N500,000 at once. If the collected amount on the account is smaller than this figure, it will be available for one lump withdrawal. It’s possible to withdraw big amounts from the accounts that store more than N500,000 at once but only under the condition that the remaining amount is enough to execute a normal programmed withdrawal.
You need to remember that in any of the described situations the withdrawal must be approved by the National Pension Commission.
- How can a retiree withdraw funds when the retirement age comes?
The Stanbic pension managers insist that at once when you become eligible for the fund withdrawal you turn to them and they prepare all the necessary documents, which will let you withdraw funds from your account without problems.
You can reach them via emails, on the phone, in an instant webchat at their official website, or via a regular paper letter. All the contact details are available at their website so that you know where to turn to them.
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- How often are people allowed to withdraw their VC?
If you need to know the date of the nearest withdrawal, remember when the last approved one was and add two years. This will be the date of the next possible withdrawal of your funds. For instance, if the latest approved withdrawal took place in May 2018, the nearest one will take place in June 2020.
- Can a person withdraw their VC completely in one attempt?
Contributors are able to withdraw no more than only 50% of the amount in a lump and only after a 2-years period after the previous withdrawal. This rule will be violated only in case the person who’s receiving the access to the amount is a foreigner who has been working in Nigeria and is now returning home.
- After the first withdrawal, how will the next ones be treated?
Every time you try to withdraw money from the account this way, you need to remember that the first withdrawal takes 50% of the entire amount you have on the account. Every next one will take 50% of the new contributions made after the previous withdrawal. It’s clear that every time, such withdrawals will become smaller and smaller if you don’t give efforts to contributing more.
- What are the ways a retiree can access and withdraw money immediately after the retirement?
There are several available ways of withdrawing money in such a case. First of all, a lump withdrawal can be performed but only in case there’s something left on your account and this something can be used to purchase an annuity or execute programmed withdrawals.
The programmed withdrawal is another option that’s available to a retiree. The program is composed by specialists who calculate a possible or expected life longevity for a particular person. This figure is used to divide the amount in separate parts in accordance with the number of years the person is supposed to live.
The third option is a lump withdrawal of the entire amount at once. This option is available to those whose accounts store less than N500,000. Finally, the last thing that can be done is the purchase of an annuity from an insurance company.
- What is the programmed withdrawal all about?
There are specific features in this mode of payment of money to retirees who have given preference to the programmed withdrawal before annuity. The main difference between these two is in the fact that retirement benefits are paid by either pension administrators or insurance companies.
The main features of the programmed withdrawal involve the following:
- Payments are executed monthly or quarterly
- Payments start either when a person turns 50 or when he or she retires, whichever of these two situations happens later
- In case the retiree passes away, the person named a beneficiary in the deceased person’s will is to receive the entire amount from the retiree’s account
- There’s a Custodian entitled by the Pension Fund who is in charge of the money
- The person can choose to change the mode of payment and move to annuity from the programmed withdrawal. However, there’s no way back and you can’t return to the pension withdrawal after moving to the annuity
- The person can keep on contributing money after the retirement. Such money is available for the withdrawal every two years
- The pension payments are executed for as long as the retiree lives or until there’s no more money in the account
What is a Stanbic IBTC pension withdrawal application?
This is a document that shows a person’s desire to withdraw money from the account. If you are interested, proceed to the website of Stanbic IBTC and find a form, which explains how to withdraw money correctly and which documents are required therefore.