PenCom eliminates pre-approval requirement for retirees to expedite payments

The National Pension Commission (PenCom) has announced a policy shift aimed at accelerating the payment of benefits to Retirement Savings Account (RSA) holders.

Effective June 1, 2025, Pension Fund Administrators (PFAs) will 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. This was disclosed in a post on the commission’s X handle.

“Effective from 1st June 2025, Pension Fund Administrators (PFAs) will no longer be required to seek approval or obtain a ‘No Objection’ from PenCom before processing and disbursing benefits, including Programmed Withdrawal, Retiree Life Annuity, and Temporary Loss of Employment benefits, among others.

“However, PFAs must continue to submit requests for approval to the Commission regarding depleted RSAS and death benefit applications, by Section 8 (2) of the Pension Reform Act 2014,”

The move is part of PenCom’s broader efforts to enhance operational efficiency and service delivery in Nigeria’s pension system. Previously, all benefit applications had to be reviewed and approved by PenCom before PFAs could authorize payments through appointed Pension Fund Custodians (PFCs).

The new policy eliminates this step, significantly reducing delays for 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 must process and approve eligible benefit applications within two (2) working days of receiving all required documentation. Once approved, PFCs must 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, reducing financial hardship for retirees and unemployed RSA holders. PenCom urges RSA holders to ensure the timely submission of required documentation to their PFAs to facilitate seamless benefit processing.

Furthermore, prospective retirees are advised to submit all relevant documents at least six (6) months before retirement to avoid any delays in accessing their entitlements.

“Before this directive, PFAs were required to review, process, and forward all benefit payment applications to the Commission for approval before the appointed PFCs could credit beneficiaries’ accounts. This new policy is designed to streamline the benefit payment process, significantly reducing delays and improving access to entitlements for retirees and other RSA holders.

“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 (6) months before retirement. All benefit applications must be supported by the documentation prescribed in the Commission’s Regulations and Guidelines,”