Voluntary Contributions (VC) is an optional contribution made above the mandatory 18% employer and employee contributions into an individual’s Retirement Savings Account (RSA). You could access your VC subject to the extant rules on withdrawal released by PenCom.

Withdrawal is TAX FREE only after FIVE YEARS of making Voluntary Contributions.

Guidelines for Voluntary Contributions Withdrawal

The National Pension Commission (PenCom) on 16th November 2017 released a Circular to guide withdrawal of Voluntary Contributions (VC). Concerns were raised by Government on the frequency of withdrawals of VC and the effect on the tax payable to the tax authorities. The objective of the Circular is to curtail the high rate of VC withdrawals and its attendant effect on tax accruing to the government. Accordingly, the following rules will apply to VC withdrawals with effect from 1st December 2017.  

  • The time frame for the withdrawal from VC will be once every two (2) years from the last approved withdrawal date.
  • Subsequent withdrawals shall be on incremental contributions from the date of last withdrawal.
  • Fifty (50%) of VC contributions made by mandatory RSA contributors shall be available for withdrawal once in two years. Taxes for this category of VC withdrawals will be paid only on income earned. The balance of Fifty Percent (50%) shall be used to enhance benefits at retirement.
  • Foreigners and exempted contributors will also be allowed to make full withdrawals (100%) after two (2) years subject to deduction of taxes on amounts remitted and income earned when the withdrawal is less than 5 years after contribution.
  • PFAs are mandated to report any single contribution into an individual’s RSA of five million naira (N5, 000,000.00) and above to the Economic and Financial Crimes Commission (“EFCC”).