By David Bamidele
The National Pension Commission (PenCom) has directed licensed Pension Fund Administrators (PFAS) to pay retirement benefits to holders of Retirement Savings Accounts (RSA) effective June 1, 2025, in the country.
This was revealed in the new circular released by the commission, saying in the statement followed the circular that PFAS will no longer require PenCom’s approval or a “No Objection” before processing and disbursing benefits, including Programmed Withdrawal, Retiree Life Annuity, and temporary loss of employment benefits.
“Before this directive, PFAs were required to review, process, and forward all benefit payment applications to the commission for approval before the appointed license Pension Fund Custodians (PFCs) could credit beneficiaries’ accounts.
According to the commission, the move is part of efforts to improve operational efficiency and service delivery in Nigeria’s pension system. Before now, all benefit applications had to be reviewed and approved by PenCom before PFAs could authorise payments through appointed PFCs.
The new policy change is to eliminate the step, significantly reducing delays for retirees and other RSA holders to get their benefits promptly.
The commission, however, noted that PFAs must still seek PenCom’s approval for depleted RSA accounts and death benefit applications, in line with Section 8 (2) of the Pension Reform Act 2014.
Under the new directive, PFAs must process and approve eligible benefit applications within two (2) working days of receiving all required documentation. Once approved, PFCs must ensure payment is made within 24 hours of receiving instructions from the PFAs.
PenCom has assured stakeholders that it will continue to monitor compliance through its regulatory technology platforms and other supervisory mechanisms to ensure transparency and accountability in the pension system.
By removing bureaucratic bottlenecks, the policy is expected to provide faster access to retirement benefits, reducing financial hardship for retirees and unemployed RSA holders. PenCom urges RSA holders to ensure the timely submission of required documentation to their PFAs to facilitate seamless benefit processing.
Furthermore, prospective retirees are advised to submit all relevant documents at least six (6) months before retirement to avoid any delays in accessing their entitlements.
“In line with its regulatory and supervisory mandate, PenCom will continue to conduct reviews of transactions processed by PFAs to ensure compliance with applicable regulations. The Commission will apply appropriate regulatory measures where necessary to uphold transparency, accountability, and the integrity of the pension system.
“RSA holders are reminded that timely submission of the necessary documentation to their PFAs is crucial for seamless access to benefits. Prospective retirees are advised to submit all relevant documents at least six (6) months before retirement. All benefit applications must be supported by the documentation prescribed in the Commission’s Regulations and Guidelines.”
Speaking to The Guardian on the development in the industry, the Director Centre for Pension Right Advocacy, Takor Ivor, said the policy shift is a welcome development for RSA holders, as it reduces unnecessary delays in accessing their retirement benefits. The streamlined process will enhance efficiency, ensuring that retirees and other eligible beneficiaries receive their funds promptly.
According to Ivor, the continued oversight by PenCom, especially for sensitive cases like death benefits and depleted accounts, maintains a necessary layer of accountability and protection for RSA holders.
For him, the approval of benefits under the CPS is a crucial aspect of ensuring that retirees enjoy a smooth transition into retirement. By allowing PFAs to handle the bulk of benefit processing independently, PenCom has reinforced its commitment to building a responsive and effective pension system.
RSA holders are encouraged to engage with their PFAs for more information and guidance on how these new directives may impact their benefit applications, he said.
