Effective from 1st June 2025, Pension Fund Administrators (PFAs) will no longer be required to seek approval or obtain a “No Objection” from PenCom before processing and disbursing benefits, including Programmed Withdrawal, Retiree Life Annuity, and Temporary Loss of Employment benefits among others. Further, the Commission implants its unbending rule, “PenCom will continue to monitor the implementation of this policy through its regulatory technology platforms and other supervisory mechanisms to ensure full compliance.”
This is the new approach of PenCom to expedite benefits payment and, according to the Regulator statement, its a significant policy initiative aimed at expediting the payment of benefits to retirement savings account (RSA) holders. The Commission has turned on the heels clearly striding away from service points that have been prone to delays of benefits payment. “This is part of ongoing efforts to enhance operational efficiency and service delivery, as outlined in the circular date 12 March 2025 on Approval of Benefits to Holders of Retirement Savings Accounts by Licenced Pension Fund Operators.”
However, PFAs the statement cleared, must continue to submit requests for approval to the Commission regarding depleted RSAs and death benefit applications, in accordance with Section 8 (2) of the Pension Reform Act 2014.
Furthermore, PFAs are mandated to process and approve eligible benefit applications within two working days of receiving all required documentation, while Pension Fund Custodians (PFCs) must ensure payment of the approved benefits within 24 hours of receiving instructions from the PFAs.
Up and until now, PFAs were required to review, process, and forward all benefit payment applications to the Commission for approval before the appointed PFCs could credit beneficiaries’ accounts. This new policy is designed to streamline the benefit payment process, significantly reducing delays and improving access to entitlements for retirees and other RSA holders. This humane approach to accelerate benefits payment within the bounds of the law is an ongoing PenCom antidote to erase delays by adopting human face and assuage rough experiences by retirees grapple with.
PenCom clears that its regulatory and supervisory mandate is intact and it would continue to conduct reviews of transactions processed by PFAs to ensure compliance with applicable regulations. Besides, it said, “The Commission will apply appropriate regulatory measures where necessary to uphold transparency, accountability, and the integrity of the pension system.
The Commission also stated that RSA holders have responsibility to make the new policy work efficiently by timely submission of the necessary documentation to their PFAs for crucial seamless access to benefits. PenCom advised prospective retirees to submit all relevant documents at least six months before retirement. Benefit applications it advised, must be supported by the documentation prescribed in the Commission’ Regulations and Guidelines.
