Ivor Takor

By Ivor Takor, mni Esq.

The General Conference of the International Labour Organisation (ILO) on 28th June, 1961 adopted Recommendation (No.115) of 1961 on Workers’ Housing. The recommendation is to the effect that each member country should, within the framework of its general social and economic policy, give effect to the General Principles of Workers Housing among others, in such manner as may be appropriate under national conditions.

The Recommendation provides that competent authorities should take such measures as are appropriate to ensure the execution of acceptable programmes of workers’ housing by securing a regular and continuous provision of the necessary financial means. The purpose is for (a) public and private facilities to be made available for loans at moderate rates of interest; and (b) such facilities should be supplemented by other suitable methods of direct and indirect financial assistance such as subsidies, tax concessions, and reduction of assessments, to appropriate private, co-operative and public owners of housing.

The Recommendation further provides that governments, employers’ and workers’ organisations should encourage co-operative and similar non-profit housing societies; and public authorities should endeavour to ensure that public and private facilities for loans on reasonable terms are available to workers who wish to own or to build their dwellings, and should take such other steps as would facilitate home ownership.

It also provides that National mortgage insurance systems or public guarantees of private mortgages should be established as a means of promoting the building of workers’ housing in countries where a sound credit market exists and where such systems are considered appropriate; appropriate measures should be taken in accordance with national practice to (a) stimulate saving by individuals, co-operative societies and private institutions which can be used to finance workers’ housing; and (b) to encourage investment by individuals, co-operative societies and private institutions in the construction of workers’ housing.


The Federal Mortgage Bank of Nigeria (FMBN) was established by the Federal Government of Nigeria in 1977 and has the mandate to Provide long-term credit facilities to mortgage institutions in Nigeria; Encourage the emergence and promote the growth of viable primary and secondary mortgage institutions to service the need of housing delivery in all parts of Nigeria; Mobilizing both domestic and offshore funds into the housing sector; Link the capital market with the housing industry; Establish and operate a viable secondary mortgage market; and Collect and administer the National Housing Fund (NHF) in accordance with the provisions of the NHF Act. Regulate the activities of primary mortgage loan originators.

The NHF was established by the NHF Act of 1992 to mobilise funds that will facilitate the provision of affordable housing for Nigerians. Under the extant NHF law, every Nigerian earning N3,000 or more per annum is required to contribute 2.5 percent of their monthly basic salary to the NHF.


Most public servants for whom the NHF scheme has been made mandatory, argue that not only is the process of securing loans cumbersome, the requirements are also hardly met by majority of contributors thereby defeating the laudable objectives of the scheme. It is believed that less than 40 percent of contributors, have been able to successfully obtained loan from the Fund to build their own houses. The contributions of those who could not access loans are refunded to them on retirement. Out of frustration, some public servants have renamed the NHF “National Housing Fraud”.

The partnership the FMBN has with private housing developers can not bring affordable housing to workers. The cost of their houses are far beyond the reach of workers and this is being done with the contribution of workers. What it means is that workers are contributing and non contributors are benefitting.


The Pension Reform Act 2014, being a peace of legislature on social protection, aimed at protecting workers who due to sickness, disability and old age cannot work, from poverty and destitution, has provision for house ownership. Section 89(2) of the Act provides that “Notwithstanding the provision of sub-section (1)(c) of this section, a Pension Fund Administrator may, subject to guidelines issued by the Commission, apply a percentage of the pension assets in the retirement savings account towards payment of equity contribution for payment of residential mortgage by the the holder of Retirement Savings Account”.

In order to give expression to the provision, the National Pension Commission (PenCom) on 23rd September, 2022, approved Guidelines on Accessing Retirement Savings Account (RSA) Balance for Payment of Equity Contribution for Residential Mortgage by RSA holders. The highlights of the Guidelines are as follows:

Eligibility: The Guidelines cover pension contributor’s in active employment, either as a salaried employee or as a self-employed person. Interested RSA holders (applicants) must meet the following conditions:

  1. 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 the employer and employee’s mandatory contributions for a cumulative minimum period of 60 months (five years);
  3. A Contributor under the Micro Pension Plan (MPP) is also eligible, provided he/she has made contributions for at least 60 months (five years) prior to the date of his/her application;
  4. RSAHolders that have less than three years to retire are eligible.
  5. Married couples, who are RSA holders, are eligible to make a joint application, subject to individual satisfying the eligibility requirements;
  6. RSA holders, if registered before 1st July 2019, must have their records updated through the RSA data recapture exercise; and
  7. Application for equity contribution for residential mortgage shall be in person and not by proxy.

Maximum Withdrawal Percentage: The maximum amount to be withdrawn shall be 25% of the total mandatory RSA balance as at the date of application, irrespective of the value of equity contribution required by the mortgage lender. Where 25% of a contributor’s RSA balance is not sufficient for payment as equity contribution, RSA holders may utilize the contingency portion of their voluntary contributions (if any).

Eligibility Criteria for Mortgage Lender: To qualify as a Mortgage Lender for this purpose, the company must be licensed by the Central Bank of Nigeria (CBN), comply with the Contributory Pension Scheme (CPS) and have valid Pension Clearance Certificate (PCC). The Commission shall publish names of eligible mortgage lenders on its website.

The Commission directed interested RSA holders to contact their PFAs for more information and guidance. The complete guidelines can also be found on www.pencom.ng


PenCom has a reputation of having a very collaborative relationship with other regulatory agencies. In order to effectively implement the provisions of Section 7(1) of the Pension Reform Act 2014, which gives retirees two retirement benefit modes, which are Programmed Withdrawal and Life Annuity, PenCom and the National Insurance Commission (NAICOM) jointly issued the “Retiree Pack”. A guide to help prospective retirees make informed decisions.

PenCom may in like manner, consider to engage the FMBN on the issue in order to come up with a joint guideline that will help prospective applicants who wish to use 25 percent of the balance of their RSA for residential mortgage to make informed decision. It is important because it will help RSA holders who are contributors to NHF to combine the two windows of opportunity to enhance their initial mortgage payment.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.