PenCom directs PFAs to pay benefits without regulatory clearance

The National Pension Commission (PenCom) says it has granted Pension Fund Administrators (PFAs) the full authority to approve and pay several categories of retirement benefits without prior clearance from the commission. PenCom said the new directive, set to take effect from June 1, is targeted at cutting bureaucratic bottlenecks and speeding up pension disbursements under […]

The National Pension Commission (PenCom) says it has granted Pension Fund Administrators (PFAs) the full authority to approve and pay several categories of retirement benefits without prior clearance from the commission.

PenCom said the new directive, set to take effect from June 1, is targeted at cutting bureaucratic bottlenecks and speeding up pension disbursements under Nigeria’s contributory pension scheme (CPS).

In a circular released by the commission, it noted that until now, PFAs had to seek PenCom’s “No Objection” before paying out retirement benefits to holders of retirement savings accounts (RSAs).

Under the new framework, the commission said PFAs will process and approve various benefits, including programmed withdrawals, retiree life annuities, payments for individuals who lose their jobs temporarily, and refunds to those exempted from the CPS.

PenCom said the change is expected to significantly reduce waiting periods for retirees and RSA holders seeking access to their funds.

“The processing, approval and payment of the above requests shall be concluded by the PFA within two (2) working days after completing the necessary documentations and instructing the appointed PFC to effect payment, with the commission in copy the.

“The medium for forwarding instructions to the PFC for processing payments shall be the shared folders deployed by the commission. The PFCs shall effect payment into the beneficiaries’ accounts within 24 hours,” the circular stated.

According to the commission, payment instructions will be transmitted via the commission’s shared folders system, ensuring seamless communication between PFAs and pension fund custodians (PFCs).

However, PenCom said it will still oversee approvals for depleted RSAs and death benefits, as stipulated in Section 8(2) of the Pension Reform Act (PRA) 2014.