Pension operators, under the auspices of the Pension Fund Operators Association of Nigeria(PenOp), said, the recent permission granted to Retirement Savings Account(RSA) holders to use certain portion of their pension contribution for mortgage, will reduce housing deficit in the country.
The operators, in a statement made available to LEADERSHIP yesterday, noted that, this policy has the potential to spur growth in other sectors of the economy, while boosting mortgage finance and home loan sector, in addition to having a positive effect on the construction value chain and building materials sector.
While applauding the National Pension Commission(PenCom) for the recent release of the guidelines that brings into effect the use of a portion of one’s Retirement Savings Account (RSA) as equity contribution for obtaining residential mortgages, they added that, “we believe it will create massive jobs for artisans and blue color workers involved in the construction value chain and also further open up wealth management and financial planning industry.”
To this end, the association said, RSA holders will now begin to plan towards a target RSA balance because they have a goal of owning a home.
“We also believe that voluntary contributions will increase because people can use the contingent portion of their voluntary contributions as part of the equity contribution for residential mortgages. In addition, more companies will now take their contributions more seriously as will staffs of these companies.
“For those who do not have an RSA account and are working in the formal sector, we urge them to commence the process in conjunction with their employers. For those in self-employment, we also encourage them to take advantage of the Micro Pension Plan (MPP),” PenOp pointed out.
Believing this policy is net positive for the pension industry and the economy as a whole, it added that, the effects are catalytic and will help to galvanise various sector of the economy.
The pension industry, over the years, the association noted, has played a significant role in the local debt and equity market, financing National and Sub National projects and debt programmes and financed transformational companies and projects.
“The industry is primmed to do more and we believe that this new policy is another milestone in the positive effect of the pension industry on the economy and also another example of the collaborative nature of the pension regulator that leads to gains for the wider economy,” the group stated.
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