The Guidelines on Accessing Retirement Savings Account (RSA) Balance towards Payment of Equity Contribution for Residential Mortgage by RSA Holders (The Guidelines) is in line with the provisions of Section 89 (2) of the Pension Reform Act (PRA 2014), which allow RSA holders to utilize part of their retirement savings as equity contribution for the purpose of securing Residential Mortgage, subject to guidelines to be issued by the Commission.
1. Set eligibility criteria for the RSA holder to access part of their RSA balances to secure residential mortgage 2. Establish documentation standards and implementation modalities to process requests from RSA holders 3. Provide access to equity finance for RSA holders in the CPS 4. Improve standard of living of RSA holders under the CPS 5. Improve enrolment in the CPS by providing incentives to employees yet to open RSAs 6. Provide a sustainable source of long term finance to the mortgage sector and spur development in the housing sector.
Eligibility Criteria for RSA Holders
1. The RSA holder shall have an Offer Letter for the property duly signed by the property owner and verified by the Mortgage Lender.
2. The RSA of the applicant shall have both employer and employee’s mandatory contributions for a cumulative minimum period of 60 months prior to the application for the RSA holder to access his/her RSA balance for the purpose of equity contribution for residential mortgage.
3. In addition to the above, the applicant may utilize the contingent portion of his/her Voluntary Contribution (VC) for equity contribution, in line with the Voluntary Contribution Guidelines under the CPS, after meeting the provision of (2) above.
4. NSITF and Pre-Scheme contributions in respect of an active RSA contributor may form part of the RSA balance for RSA Residential Mortgage in determining the 25% of equity contribution subject to the applicant meeting the provision of (2) above.
5. Where an RSA holder who wishes to include his/her VC contingent portion, NSITF and Pre-Scheme contribution as equity contribution he/she shall sign a consent with his/her PFA to that effect.
6. Micro Pension Contributor shall be eligible to access his/her RSA balance towards the payment of equity contribution for residential mortgage provided he/she has made contributions for a minimum of 60 months prior to his/her application.
7. In addition to the above, the applicant may utilize the contingent portion of his/her contribution, in line with the Guidelines for Micro Pension Plan, after meeting the provision in (6) above.
8. Where a Micro Pension Contributor wishes to include his/her contingency portion as equity contribution, he/she shall sign a consent with his/her PFA to that effect.
9. The RSA holder shall provide documents/information as required under Section 5.0 of the Guideline and other additional documentation that may be specified by the Commission from time to time.
10. RSA Holders who had accessed their RSA balances due to loss of employment prior to the issuance of these Guidelines shall be eligible to access their RSAs for equity contribution, provided their RSAs had received employer and employee contributions for a minimum of 60 months from the date of first contribution.
11. RSA holders that have utilised 25% of their RSA balance for equity contribution for residential mortgage shall be eligible for payment of 25% of their RSA for loss of job in line with the provision of Section 7(2) of PRA 2014.
12. RSA Holders that have less than 3 years to retirement shall not be eligible to use a portion of their RSA balances as equity contribution for residential mortgage.
13. Existing Retirees on CPS and exempted persons under the PRA 2014 shall not be eligible to use their RSA balances for payment of equity contribution for Residential Mortgage.
14. Married couples, who are RSA holders, shall be eligible to make a joint application, subject to individually satisfying the eligibility requirements set out in these Guidelines.
1. The applicant shall obtain a property offer letter from the property owner or approved agent and approach a Mortgage Lender.
2. The applicant shall fill an application for mortgage, which shall be provided by the Mortgage Lender and attach the property offer letter.
3. The application form shall contain the following minimum information: I. Full name of the RSA holder II. PIN of the RSA holder III. Name of the Mortgage Lender IV. Value of the property V. Name of his/her spouse (if it is a joint mortgage) VI. Evidence of marriage (If it is a joint mortgage) VII. PIN of his/her spouse (If it is a joint mortgage) VIII. PFA of his/her spouse (If it is a joint mortgage)
4. The Mortgage Lender shall review the application form and verify the genuineness of the property offer.
5. The Mortgage Lender shall do its due diligence to ensure that the property has a valuation report.
6. Upon confirmation of the property offer letter, the applicant shall approach his/her PFA and request for his/her RSA Statement for the purpose of accessing the 25% of his/her RSA balance for payment of equity contribution.
7. In a joint application, each party shall apply to their respective PFA’s with copies of the verified property offer letter.
8. The PFA shall issue a duly endorsed RSA statement to the applicant, which the applicant shall forward to his/her Mortgage Lender.
9. The PFA shall update record on Applications for Equity Contribution for Residential Mortgage upon issuing the RSA Statement to RSA holder.
10. Upon receipt of the duly endorsed RSA statement, the Mortgage Lender shall verify if the 25% of the applicant’s RSA balance will be sufficient as equity contribution.
11. Where 25% of the RSA balance is sufficient as equity contribution, the Mortgage Lender shall issue a mortgage offer letter to the applicant.
12. Where 25% of the RSA balance(s) is not sufficient, the Mortgage Lender shall request for the payment of supplementary equity contribution from the applicant(s).
13. Upon confirmation of payment of supplementary equity contribution, the Mortgage Lender shall issue a mortgage offer to the applicant(s).
14. Within two working days of the issuance of the mortgage offer letter to the applicant(s), the Mortgage Lender shall forward a copy of the mortgage offer letter and the under listed documents/ additional information to the applicant(s) PFA: I. Copy of the mortgage application form II. Verified property offer letter, which should contain, at the minimum, the value of property, type of property and address of the property III. Loan amount IV. Equity contribution required V. Bank account details of the applicant with the Mortgage Lender VI. Indemnity by the Mortgage Lender to the PFA on the use of the equity contribution. VII. Evidence of payment of difference where 25% of RSA cannot cover the equity required
15. The applicant may after two working days of receiving his/her mortgage offer letter, approach his/her PFA to request for payment of his/her Equity Contribution for Residential Mortgage.
16. The applicant shall obtain and fill an Application Form, with indemnity to the PFA, for the payment of his/her Equity Contribution for Residential Mortgage.
17. In a joint application, each party shall apply to their respective PFA with a copy of the mortgage offer letter.
18. The application form shall contain the following minimum information: I. Full name of the RSA holder and RSA PIN II. Type of mortgage (single or joint mortgage) III. Full name and address of the Mortgage Lender IV. Name and address of the property V. The type of property e.g. 1,2,3…. Bedrooms, Bungalow, Semi-detached or detached. VI. Total value of the property VII. Total value of RSA balance as at date of applying for RSA Statement VIII. Equity amount which shall be equal or less than 25% of the RSA balance IX. Name of the spouse and RSA PIN (for joint mortgage only) X. Name of the spouse’s PFA (for joint mortgage only) XI. The amount of equity payable by each party in a joint application XII. Evidence of supplementary payment where 25% of the applicant’s RSA balance is below the required equity contribution for his/her residential mortgage.
19. The PFA shall review the application form and the supporting documents received from the Mortgage Lender for completeness using a checklist of requirements stipulated above within two working days.
20. Upon successful completion of the documentation review, the PFA shall update the applicant’s Mandate File within two working days.
21. If any exceptions or discrepancies are identified during the documentation review, the PFA shall communicate the exceptions to the Mortgage Lender within two working days of identifying such exceptions.
22. The PFA shall compute and validate that the requested amount is not more than 25% of his/her RSA Balance.
23. The PFA shall then process the application and forward same to the Commission within two working days of successful documentation reviewed above.
(a) The PFA and PFC shall forward details of payments made in respect of equity contribution for residential mortgage on monthly and annual basis to the Commission in a format to be provided.
(b) The PFA and PFC shall forward return on the records of rejected applications with reasons on monthly and annual basis to the Commission in a format to be provided.
(c) The PFA and PFC shall forward return on the records of equity contribution refunded by the Mortgage Lender with reasons on monthly and annual basis to the Commission in a format to be provided.
(d) The Commission shall reconcile its records on all approvals in respect of equity contribution for residential mortgage and the returns rendered by PFAs and PFCs on monthly and annual basis.
PFAs and PFCs shall be liable for administrative sanctions (monetary/nonmonetary) as may be determined by the Commission from time to time for infractions/violations of the following provisions of these Guidelines:
(i) Printing RSA statement for an RSA holder for the purpose of equity contributions for residential mortgage;
(ii) Processing an RSA holder’s request and forward same to the Commission within stipulated time frame;
(iii) Giving its PFC instruction to remit the approved value for equity contribution to the applicant’s account opened with the Mortgage Lender upon receipt of approval from the Commission;
(iv) Forwarding details of payments made on equity contribution for residential mortgage approvals on monthly and annual basis to the Commission in the format of the template to be provided;
(v) Negligence by PFA and PFC in the approval process that leads to fraud and or loss to the RSA holder.