The National Pension Commission has introduced a new directive that empowers Pension Fund Administrators to approve and process various categories of retirement benefits without prior authorization from the commission.
This policy, set to take effect on June 1, 2025, aims to streamline pension payments and eliminate bureaucratic bottlenecks within Nigeria’s Contributory Pension Scheme.
Previously, PFAs were required to obtain PenCom’s “No Objection” before disbursing funds to Retirement Savings Account holders.
Under the new directive, PFAs can now independently process and approve benefits such as programmed withdrawals, retiree life annuities, benefits for temporarily unemployed individuals, and refunds for those exempted from the CPS. This change is expected to accelerate the approval process, allowing RSA holders to access their funds more efficiently.
With this reform, PFAs must process, approve, and finalize payment instructions within two working days of receiving complete documentation. Once approved, the PFAs will direct their appointed Pension Fund Custodians to credit beneficiaries’ accounts within 24 hours. Payment instructions will be transmitted via the Commission’s Shared Folders system, ensuring seamless communication between PFAs and PFCs.
Despite the expanded authority granted to PFAs, certain benefit categories will still require PenCom’s approval. These include applications for depleted RSAs and death benefits, as outlined in Section 8(2) of the Pension Reform Act 2014.
This directive is expected to enhance service efficiency, reduce administrative delays, and improve the overall experience for retirees and RSA holders seeking to access their benefits. The removal of PenCom’s pre-approval requirements will significantly expedite the processing of voluntary contributions and mortgage-related equity payments.
