Pension fund managers have urged contributors to begin preparing for retirement long before leaving active service, stressing that a clear understanding of pension benefit options and compliance requirements is critical to securing timely access to retirement benefits and avoiding unnecessary delays.

They gave the advice during its webinar recently, ‘Retire Ready: Programmed Withdrawal, Annuity and You’, where pension experts provided practical guidance on retirement planning, the options available to retirees under the Contributory Pension Scheme (CPS) and the steps contributors should take to ensure a seamless transition from employment to retirement.

Speaking during the session, Head of Benefits Administration, Access ARM Pensions, Zainab Bello, said while many Nigerians spend decades contributing to their retirement savings accounts (RSAs), relatively few take the time to understand how their retirement benefits are calculated or paid.

“People spend over 30 years planning for retirement but often spend only a few days trying to understand how their retirement benefits actually work,” Bello said.

She explained that one of the most important decisions retirees make is choosing between Programmed Withdrawal and Annuity, noting that each option offers distinct advantages depending on an individual’s financial goals and family circumstances.

According to her, retirement under the CPS begins with a choice of payout option before the retiree receives a lump sum and periodic pension payments.

Bello noted that retirement benefits extend beyond monthly pension contributions, explaining that an RSA also comprises investment income earned over the years, accrued rights where applicable, pension enhancements and additional remittances.

She clarified that PenCom does not prescribe a fixed percentage for lump-sum withdrawals, as payments are determined by whether sufficient funds remain in the RSA to sustain the minimum pension required under the regulations.

Distinguishing the two retirement income options, Bello said retirees who opt for Programmed Withdrawal continue to benefit from investment returns because their pension assets remain invested under the management of their PFA.

She noted that this allows pensions to be enhanced periodically as investment returns improve. In contrast, retirees who choose an annuity receive guaranteed lifetime payments from a licensed insurance company based on prevailing interest rates and actuarial assumptions.

“Both programmed withdrawal and annuity are valuable retirement benefit options, each designed to meet different financial needs and retirement goals. The most suitable choice depends on an individual’s personal circumstances, financial priorities and long-term retirement objectives. We encourage retirees to fully understand both options and seek professional guidance before making a decision,” she said.

Also speaking, Head of Compliance, Ayodeji Ayo-Majaro, said compliance should not be viewed merely as a regulatory obligation but as an essential safeguard for retirement security.

“Compliance is not just about obeying rules. It is protecting your retirement benefits, your dignity and your financial future,” he said.

He identified poor employment records, multiple RSAs, inconsistent personal information and incomplete documentation as some of the leading causes of delays in processing retirement benefits.

According to Ayo-Majaro, contributors should regularly verify their employment records, National Identity Number, RSA details, beneficiaries and next-of-kin information to ensure all records are accurate and consistent.

“Many retirement disputes originate from poor employment record documentation. Check yours today,” he said.

He also advised contributors to monitor their pension remittances regularly to ensure employers are making complete and timely contributions, warning that missing remittances or unreconciled records could significantly affect retirement benefits.

The webinar also featured a presentation on Retiree Life Annuities by experts in the Insurance Industry alongside the role of Trusts & Wills in Estate Planning to ensure that contributors get an unbiased, all-rounded professional guide to aid their decisions, highlighting how retirees can secure guaranteed lifetime income while ensuring an orderly transfer of wealth to beneficiaries.