The National Pension Commission (PenCom) has directed pension fund administrators (PFAs) to pay direct payment of retirement benefits to retirement savings account (RSA) holders effective June 1, 2025.
With the new system, RSA holders could receive payment three days from the time they make a request for withdrawals.This is contained in the new circular released by the commission. It noted that PFAs would no longer require PenCom’s approval or a “no objection” before processing and disbursing benefits, including programmed withdrawal, retiree life annuity and temporary loss of employment benefits.
Before this directive, PFAs were required to review, process and forward all benefit payment applications to the commission for approval before the appointed pension fund custodians (PFCs) could credit beneficiaries’ accounts.
However, the commission said the new move has waived its approval as part of efforts to improve operational efficiency. The policy change eliminates the PenCom approval process, significantly reducing delays suffered by retirees and other RSA holders.
The commission, however, noted that PFAs must still seek PenCom’s approval for depleted RSA accounts and death benefit applications, in line with Section 8 (2) of the Pension Reform Act 2014.
Under the new directive, PFAs would process and approve eligible benefit applications within two working days of receiving all required documentation. Once approved, PFCs are to ensure payment is made within 24 hours of receiving instructions from the PFAs.
PenCom has assured stakeholders that it will continue to monitor compliance through its regulatory technology platforms and other supervisory mechanisms to ensure transparency and accountability in the pension system.
By removing bureaucratic bottlenecks, the policy is expected to provide faster access to retirement benefits as well as reduce financial hardship for retirees and unemployed RSA holders.
PenCom urged the RSA holders to ensure the timely submission of required documentation to their PFAs to facilitate seamless benefit processing. Prospective retirees are advised to submit all relevant documents at least six months before retirement to avoid any delays in accessing their entitlements.
“In line with its regulatory and supervisory mandate, PenCom will continue to conduct reviews of transactions processed by PFAs to ensure compliance with applicable regulations. The Commission will apply appropriate regulatory measures where necessary to uphold transparency, accountability, and the integrity of the pension system.
“RSA holders are reminded that timely submission of the necessary documentation to their PFAs is crucial for seamless access to benefits. Prospective retirees are advised to submit all relevant documents at least six months before retirement. All benefit applications must be supported by the documentation prescribed in the Commission’s Regulations and Guidelines,” the circular said.
