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Get more from your pension account through PAL Pensions AVC.

Palpensions AVC

What's PAL Pensions AVC

Additional Voluntary Contributions (AVCs) are extra funds you can add to your statutory pension contributions. It is relevant to note that by law, these extra savings can only be deducted from your salary. It can be a tax-efficient method of boosting your retirement savings, as these contributions are deducted before tax is applied.

It's the little extra that makes the big difference

Why add AVC to your pension RSA account

Higher returns than bank savings accounts.

With AVC, you receive better returns than your regular saving account (expected returns of 12%/annum versus 2% per annum on savings account) and tax benefits on on interest income earned.

Relatively low investment risk

Additional Voluntary Contributions are invested in a diversified portfolio of assets which would help to lower investment risks.

Access to 50% of savings that have been retained for at least, 2 years

With AVC, you can withdraw half of your savings in two years.

Frequently Asked Questions

Additional Voluntary Contributions (AVCs) are extra funds you can add to your statutory pension contributions. It is relevant to note that by law, these extra savings can only be deducted from your salary. It can be a tax-efficient method of boosting your retirement savings as these contributions are deducted before tax is applied.

The following categories of persons are eligible to make Additional Voluntary Contributions:

 

  • All current RSA holders
  • Employees of organizations with approved existing pension schemes e.g CPFAs
  • Any person who retired, disengaged or whose employment was terminated and is currently receiving pension under the contributory pension scheme, but secured another employment on contract basis.
  • Any person who is appointed by the President of the Federal Republic of Nigeria, State Government, and elected officers to hold office for a stipulated tenor and who is not a career civil servant.
  • Any foreigner residing and working in formal sector in Nigeria.

Here are some major benefits of AVC:

 

  • Boosts RSA balance: Additional Voluntary Contribution is one way to boost your savings for a more comfortable life at retirement.
  • Flexibility: Voluntary contribution can be any amount of your choice, so long as it is not more than one-third of your monthly salary. You decide on the frequency of the contribution, either monthly or quarterly.
  • Ease: The deductions are made together with your statutory contributions and remitted on your behalf by your employer.
  • Tax savings: Voluntary contributions are tax exempt. It is deducted before tax
  • Financial discipline: Voluntary contributions are deducted at source, hence the funds are not available for you to spend and this would help you better manage your finances.
  • VCs are invested in a very diversified portfolio which would help to lower investment risks.
  • At retirement, if your contributions have been in the account for up to five years, you can choose to withdraw all of it with interest OR choose to use it to augment your balance for Programmed withdrawal or purchase of annuity.

AVC is deducted from your salary before your tax is computed. All you need to do is to notify your employer via email about your desire to make additional voluntary contributions, stating the amount and frequency (you can only make AVCs once a month). You can also complete the AVC form on our website and submit a copy to your employer and PAL.

You can only contribute up to 1/3 of your monthly salary as AVC. Also, any single transaction of more than N5million naira must be reported to EFCC by the PFAs/PFCs.

  • With AVC, you receive better returns than your regular savings account (expected return of 12%/annum versus 2%/annum on savings account) and tax benefits on interest income earned.
  • Unlike investment instruments such as shares, AVC investments are less risky/volatile and are not subject to tax. The return on investment is attractive and competitive so, you can easily plan for the future

AVCs like the statutory pension contributions, are invested in diversified portfolio of assets; in line with PenCom’s regulation on investment of pension assets.

To withdraw from your AVC, complete and submit our benefit withdrawal form, your bank statement and letter requesting for your funds. Your application will be processed, and benefits paid upon receipt of approval from the National Pension Commission.

Contributors in active service can only withdraw 50% of their VC after the contributions have been retained for a period of 2 years in their RSA. Subsequent withdrawals will be on the incremental contributions remitted after last withdrawal date.

The 50% balance of VC in the account will form part of the RSA balance which will either be accessed as Lump Sum and programmed withdrawal or used to purchase an annuity upon retirement.

Your voluntary contributions are retained in your RSA to be accessed only at the expiration or termination of your contract. Where the withdrawal is made in less than 5 years from the date the voluntary contribution was made, tax is applied, and the deduction is based on both income and principal.

Your voluntary contributions are retained in your RSA to be accessed only at the expiration or termination of your contract. Where the withdrawal is made in less than 5 years from the date the voluntary contribution was made, tax is applied, and the deduction is based on both income and principal.

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