A Retirement Savings Account (RSA) holder who voluntarily retires, disengages or is disengaged before attaining the age of 50 years and is unable to secure another employment after four months, is entitled to withdraw 25% of the balance in his/her RSA.
But there has been several instances where such RSA holders have been stranded and unable to withdraw the 25% because their employers did not issue termination letter or accept their resignation.
The above is now a thing of the past because the National Pension Commission (PenCom) has reviewed the documentation requirement for Retirement Savings Account (RSA) holders who want to withdraw 25% from their RSA, the Revised Regulation on the Administration of Retirement and Terminal Benefits has simplified the provisions on the notification and documentation required for access to 25% of RSA due to temporary loss of job.
The provision was specifically designed to address situations where employers refuse to confirm the disengagement of their former employees. Prior to this revision, a letter of acceptance of resignation or disengagement issued by the employer is mandatory for a RSA holder seeking payment of 25% due to temporary loss of job.
However, the Revised Regulation provides that where the employer fails/refuses to accept the resignation letter from the employee, the PFA shall write the employer confirming the employee’s resignation and ensure that an acknowledgement copy is kept as proof of receipt. Where the employer fails to respond to the PFA’s inquiry within 30 days, the employer’s refusal is taken as acceptance of the employee’s resignation for the purpose of benefits payment.
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