The National Pension Commission (PenCom) has announced a major policy reform aimed at accelerating the payment of retirement benefits to holders of Retirement Savings Accounts (RSA). The new directive, which takes effect from June 1, 2025, eliminates the requirement for Pension Fund Administrators (PFAs) to obtain prior approval from PenCom before processing and disbursing benefits, including Programmed Withdrawals, Retiree Life Annuities, and Temporary Loss of Employment benefits.
This move is part of PenCom’s broader effort to enhance operational efficiency and service delivery in Nigeria’s pension system. The reform is expected to significantly reduce delays that retirees face in accessing their entitlements.
While PFAs will no longer need PenCom’s approval for routine benefit payments, they must still seek approval for requests related to deceased RSAs and death benefits, as mandated by Section 8(2) of the Pension Reform Act 2014.
According to the directive, PFAs are now required to process and approve eligible benefit applications within two working days of receiving all necessary documents. Additionally, Pension Fund Custodians (PFCs) must ensure payment of these approved benefits within 24 hours of receiving payment instructions from PFAs.
Previously, PFAs had to submit all benefit applications to PenCom for review before PFCs could disburse funds to retirees. This process often resulted in significant delays, preventing retirees from promptly accessing their funds. The new policy streamlines the benefit payment process, allowing faster access to retirement funds while maintaining regulatory oversight.
PenCom has assured RSA holders that it will continue monitoring PFAs through its regulatory technology platforms to ensure compliance with the new directive. The Commission will also conduct periodic reviews of transactions processed by PFAs to uphold transparency and accountability in the pension system.
RSA holders are advised to submit their benefit applications and necessary documentation at least six months before retirement to avoid delays. All applications must comply with PenCom’s regulations and guidelines.
