PenCom Streamlines Pension Payouts
…Cuts Approval Delays for Retirees
By Patience Ikpeme
The National Pension Commission (PenCom) has unveiled a new policy designed to significantly accelerate the payment of benefits to Retirement Savings Account (RSA) holders, marking a major step towards improved efficiency and service delivery within the pension sector.
The initiative, detailed in the Circular on Approval of Benefits to Holders of Retirement Savings Accounts by Licensed Pension Fund Operators dated 12 March 2025, aims to reduce the bureaucratic hurdles faced by retirees when accessing their pension funds.
Starting from 1st June 2025, Pension Fund Administrators (PFAs) will be granted greater autonomy in processing and disbursing benefits. Specifically, they will no longer need to seek PenCom’s prior approval or obtain a “No Objection” for processing and disbursing benefits related to Programmed Withdrawal, Retiree Life Annuity, Temporary Loss of Employment, and other eligible benefits.
This policy shift is expected to drastically reduce the processing time for retirees, allowing them to access their funds more swiftly. However, the Commission has clarified that PFAs must still submit requests for approval for depleted RSAs and death benefit applications, adhering to Section 8 (2) of the Pension Reform Act 2014.
To ensure timely payments, PenCom has set clear timelines for PFAs and Pension Fund Custodians (PFCs). PFAs are now required to process and approve all eligible benefit applications within two (2) working days of receiving complete documentation. Subsequently, PFCs must ensure the payment of approved benefits within 24 hours of receiving instructions from the PFAs.
PenCom has committed to rigorous oversight of the new process. The Commission will utilize its technological platforms and regulatory instruments to monitor compliance and ensure that PFAs and PFCs adhere to the stipulated timelines.
The Commission has also emphasized the crucial role of RSA holders in ensuring prompt benefit payments. Retirees are advised to submit all necessary documentation to their PFAs at least six (6) months before their retirement date. This proactive approach will help avoid delays and ensure a smooth transition into retirement.
PenCom has also reminded all stakeholders that all benefit applications must be supported by the documentation as prescribed in the Commission’s Regulations and Guidelines. This adherence to prescribed documentation is crucial for maintaining the integrity of the pension system.
For those seeking further information on the new policy and the processes involved in accessing benefits, PenCom has provided access to detailed information on its official website: pencom.gov.ng.
This policy initiative by PenCom demonstrates the Commission’s commitment to enhancing the experience of RSA holders and ensuring the efficient and timely disbursement of pension benefits. By streamlining the approval process and setting clear timelines, PenCom aims to build a more responsive and reliable pension system for all Nigerians.
