Consolidating on Additional Voluntary Contributions-Odunze Reginald C

The Pension Reform Act 2014 came in as an amendment to the Pension Reform Act 2004 clearly stated on the Tax on Voluntary contribution withdrawals highlighting that  “Withdrawal of voluntary contributions (VC) within 5 years from the date the contributions were made is still subject to tax. However, as clarified in section 10 subsection (4), only the income earned on the VC will be subject to tax at the point of withdrawal.
Voluntary Contribution that is withdrawn after 5 years from the date the contribution was made will still be tax free.

Those who kick against voluntary contribution , often make reference to double taxation, but that has been clarified  in section 10 subsection 4, that taxation on voluntary contribution is based only the income earned.

Odunze in an article captioned “The need for additional Voluntary Contribution” noted that “The idea of voluntary contribution will increase the pension pot and it stems from the inability of the pension pot to take care of the pension’s expectations, expenditures, medical expenses and other issues arising from the pension contributions during retirement and old age”

Continuing Odunze (op cited) stated that “Most retirees often discover that their pension Pot is not enough to carry them through and that bring us to the idea of voluntary contribution. Most retirees develop one problem or the other when they discovered that their pension pot is not enough to carry them through during old age and retirement.  But the issue of the rising cost of living and the sudden realization that the money they saved will not be able to cater for their old age” often results in sorrow mood and a bleak future.

In the article highlighted above which appeared in REGINALD ODUNZE .COM , the writer noted that “Old age is what people pray for  right from their upward age of 15 years and I wonder why people feel terrible uncomfortable on advancing old age. The result has been that bleak rather than happiness”

Similarly Odunze in article captioned “Investment the key to survival in old age, opined that “Venita Van Caspel according to schuller noted while studying investment “heard a very startling statistics of every people reaching age 65, only 2 percent were financially independent” continuing Schuller op cited opined that Venita was raised in a Christian home without money, which she claims gave a health respect for a dollar”

The need for voluntary contribution came as a result of the insufficiency of pension contribution and the inability of some private sectors to pay accrued pension rights. The need for accrued pension stems out of the desire of the Federal Government to cater for the period preceding 2004, where an employee have put in number of years to the organization. But a situation where the organization  refused to provide for such accrued right , what do the retirees do,  of course nothing , but if there is additional voluntary contribution , it can take care of any shortfall in the expectation   of the retirees pension pot.

But one of the incentives of voluntary contribution is the tax incentive as it reduces the taxable income and provides additional income during retirement.

Culled from Reginaldodunze.blogspot.com