By NIyi Jacobs
The National Pension Commission (PenCom) has introduced a groundbreaking policy aimed at streamlining the payment of benefits to Retirement Savings Account (RSA) holders, enhancing operational efficiency and service delivery within the pension industry.
According to the Circular on Approval of Benefits to Holders of Retirement Savings Accounts by Licensed Pension Fund Operators, dated March 12, 2025, the new policy will take effect from June 1, 2025. Under this initiative, Pension Fund Administrators (PFAs) will no longer be required to seek approval or obtain a “No Objection” from PenCom before processing and disbursing benefits. This applies to various categories of benefits, including Programmed Withdrawal, Retiree Life Annuity, and Temporary Loss of Employment benefits, among others.
However, the policy maintains that PFAs must still submit approval requests to PenCom for cases involving depleted RSAs and death benefit applications, in accordance with Section 8 (2) of the Pension Reform Act 2014.
The new directive also establishes a stringent timeline for processing benefit applications. PFAs are required to process and approve eligible benefit requests within two working days of receiving all necessary documentation. Additionally, Pension Fund Custodians (PFCs) are mandated to disburse approved benefits within 24 hours of receiving payment instructions from PFAs.
PenCom’s latest move is expected to significantly improve the speed and efficiency of benefit payments to retirees and other RSA holders, promoting better service delivery within the pension sector.
