PENCOM Issues New Guidelines On Voluntary Pension Contributions

A circular dated 16 November 2017 has been issued by the National Pension Commission (PENCOM) to all licenced Pension Fund Administrators and Custodians. Below are the highlights:

In respect of voluntary contributions (VCs) by Mandatory Contributors:

1. Withdrawals from VC account is limited to once every 2 years
2. Taxes will be deducted on any income earned if withdrawn within 5 years 
3. Total withdrawal from VC account is limited to 50% while the balance of 50% must be kept to augment contributor's retirement benefit

In respect of VC by Exempt Contributors (including foreigners)

1. Withdrawals from VC account is limited to once every 2 years
2. All the VCs may be withdrawn after 2 years but subject to tax on both the principal contribution and income earned thereon