The National Pension Commission (PenCom) of Nigeria has issued a directive mandating Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) to expedite the payment of pension benefits to eligible recipients.
Under the new rules, PFAs must approve and process benefit applications within two working days of receiving the necessary documentation, while PFCs are required to disburse the approved payments within 24 hours thereafter.
Effective 1st June, 2025, PFAs will no longer be required to seek prior approval from PenCom for processing and disbursing benefits, including programmed withdrawals, retiree life annuities, and temporary loss of employment benefits.
This marks a significant shift from the previous system, which required PenCom’s “No Objection” before payments could be made.
The policy change, detailed in a circular released on March 12, 2025, aims to streamline the benefit payment process and improve service delivery to Retirement Savings Account (RSA) holders. PenCom stated that this initiative is part of ongoing efforts to enhance operational efficiency within the pension sector.
PenCom CIRCULAR ON APROVAL AND PAYMENTS OF BENEFITS BY PFAS
While the new directive grants PFAs greater autonomy, they must still seek PenCom’s approval for depleted RSAs and death benefit applications, as stipulated in Section 8 (2) of the Pension Reform Act 2014.
Also Read: PenCom Pledges Financial Security for Retirees
PenCom has committed to monitoring the implementation of the new policy through its regulatory technology platforms and other supervisory mechanisms to ensure full compliance.
The commission also warned that it will conduct reviews of transactions processed by PFAs to ensure adherence to regulations and will apply appropriate regulatory measures to maintain transparency, accountability, and the integrity of the pension system.
RSA holders are encouraged to submit all required documentation to their PFAs promptly to ensure seamless access to their benefits.
Prospective retirees are advised to submit all relevant documents at least six months before their retirement date. All benefit applications must be supported by the documentation prescribed in PenCom’s regulations and guidelines.
This move is expected to significantly reduce delays in benefit payments and improve access to entitlements for retirees and other RSA holders in Nigeria.
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