PenCom orders PFAs to process pension payments in two days from June
PenCom
Nike Popoola
The National Pension Commission (PenCom) has empowered the Pension Fund Administrators (PFAs) and ordered them to process and approve pension payments under the Contributory Pension Scheme (CPS) within two working days after the necessary documentations are completed by the retirees and beneficiaries.
This was disclosed in a circular to all Licensed Pension Fund Operators numbered ‘PenCom/lNSP/Surv/2025/Aut/451’, dated 12 March 2025, and titled, ‘Approval of benefits to holders of Retirement Savings Accounts by licensed Fund Operators’, obtained by Dailyeconomy.
It also instructed the appointed Pension Fund Custodians (PFCs) to effect payment with PenCom in copy, in order to shorten the waiting period of payment.
With effect from June 1, 2025 when this regulation takes full effect, the PFAs will no longer wait for PenCom’s approval before paying retirees as they have been empowered to do this duty on their own.
PenCom noted that it had over the years issued several regulations, pursuant to its powers under the Pension Reform Act 2014 (PRA 2014), to establish clear guidelines, standards, and procedures for administering retirement and terminal benefits under the Contributory Pension Scheme (CPS).
Pursuant to Section 55 (f) and (g) of the PRA 2014, which mandated Pension Fund Administrators (PFAs) to undertake the computations and payment of retirement benefits to holders of Retirement Savings Accounts (RSAs), PFAs were mandated by the Commission to review, process and forward all applications for payments of benefits of RSA holders to PenCom for approvals, before benefit payments are credited into beneficiaries’ accounts by appointed Pension Fund Custodians (PFC).
The circular stated, “In furtherance of the Commission’s commitment to improving the efficiency of processes and ensuring service delivery to RSA Holders, the Commission deemed it imperative to allow PFAs to solely perform their statutory functions in the administration of benefits as stipulated under Section 55 (f) and (g) of the PRA 2014.
“Accordingly, the Commission hereby issues the following directives:
“Effective from 1 June 2025, the Commission will no longer Approve or grant “No Objections” to the following benefits applications before the PFAs process them for payments:
“Programmed Withdrawal; Retire Life Annuity; Access to Benefits upon Temporary Loss of Employment; En Bloc Payments to retirees whose RSA balances cannot provide a reasonable pension; Pre-Pension Reform Act Benefits Payments to retirees in the Private Sector; Voluntary Contributions; Payments to RSA holders towards payment of equity contributions for residential mortgages; Payment of Nigeria Social Insurance Trust Fund (NSITF) Contributions to retirees whose NSITF contributions were transferred to their RSAs; Changes in the periodicity of pension payments; Resolution of Errors from employers’ remittances of pension contributions for Private Sector and Self-funding Agencies; and Refunds to persons exempted from participating in the CPS by the PRA 2014.”
It added that, “The processing, approval and payment of the above requests shall be concluded by the PFA within two (2) working days after completing the necessary documentations and instructing the appointed PFC to effect payment, with the Commission in copy.
“The medium for forwarding instructions to the PFC for processing payments shall be the Shared Folders deployed by the Commission.
“The PFCs shall effect payment into the beneficiaries’ accounts within 24 hours upon receipt of instructions from the PFA.
“PFAs shall continue to forward requests for approval to the Commission relating to depleted RSAs and death benefit applications in line with Section 8 (2) of the PRA 2014.”
In order to facilitate the implementation of the above directives, the Commission has approved the amendment of Sections of five regulatory instruments on benefits administration.
