The Traffic

BIG WIN FOR RETIREES: PFAs Now Have Full Control Over Pension Payments—No More Delays

By Achimi Muktar

In a groundbreaking shift that promises to eliminate delays and enhance efficiency, the National Pension Commission (PenCom) has granted Pension Fund Administrators (PFAs) full autonomy to approve and process several categories of retirement benefits—without needing prior approval from the Commission.

This new directive, set to take effect on June 1, 2025, is expected to revolutionize pension payments, making access to retirement funds faster and more seamless for millions of Nigerians under the Contributory Pension Scheme (CPS).

Previously, retirees and contributors faced frustrating delays because PFAs were required to obtain a “No Objection” approval from PenCom before disbursing funds. This process often led to backlogs, causing unnecessary financial distress for those in need of their money.

However, with the new directive, PFAs can now independently process and approve:
✅ Programmed Withdrawals – allowing retirees to receive periodic pension payments.
✅ Retiree Life Annuities – ensuring a structured payout for pensioners.
✅ Benefits for Temporarily Unemployed Individuals – offering relief to those out of work.
✅ Refunds for Those Exempted from the CPS – providing direct reimbursement to eligible individuals.

Two-Day Payment Guarantee

To further fast-track payments, PenCom has mandated a two-day turnaround time for processing retirement benefits. Under this system:
1️⃣ PFAs must approve and process payments within two working days after receiving complete documentation.
2️⃣ Once approval is granted, PFAs will direct their Pension Fund Custodians (PFCs) to credit beneficiaries’ accounts within 24 hours.
3️⃣ All transactions will be processed using PenCom’s Shared Folders system, ensuring smooth and transparent communication between PFAs and PFCs.

While this marks a major win for retirees and RSA holders, PenCom will still retain control over certain high-risk payments, including:

Applications for depleted RSAs (where pension savings have been exhausted).

Death benefits payments to next of kin.

New Rules, New Opportunities

To support this transition, PenCom has made key regulatory amendments to five major guidelines governing pension benefit administration:
📌 Retirement Benefits Administration: PFAs no longer need to send approvals to PenCom before processing payments.
📌 Voluntary Contributions: PFAs can now approve withdrawals directly without extra bureaucratic steps.
📌 RSA Balances for Mortgages: PFAs are now empowered to approve equity contributions for homeownership.
📌 Pension Enhancements for Retirees: Additional benefits for pensioners can now be processed without PenCom’s intervention.

What This Means for You

For RSA holders and retirees, this historic reform means faster, stress-free access to pension funds. No more waiting for weeks or months—your money will now be accessible within days.

For Nigeria’s pension industry, this move reinforces the autonomy of PFAs, allowing them to fully execute their responsibilities while PenCom maintains oversight to ensure compliance.

This policy shift is expected to boost confidence in the pension system, encourage more contributors to participate, and ultimately improve the overall efficiency of pension fund management in Nigeria.

The Bottom Line

If you’re planning to access your retirement funds, this new PenCom directive means one thing: no more unnecessary delays, no more bottlenecks—just fast and efficient pension payments!