PenCom empowers PFAs to approve retirement benefits without regulatory clearance

March 15, 2025 8:42 pm

PenCom commences online enrolment exercise for prospective retirees The National Pension Commission (PenCom) says it has commenced the online verification and enrolment exercise for prospective retirees in ministries, departments and agencies (MDAs) of the federal government. The commission said the exercise is for those who are due to retire in 2025. Omolola Oloworaran, acting director-general (DG), PenCom, spoke at a workshop on the online enrolment application for pension desk officers (PDOs) of treasury-funded ministries, departments and agencies (MDA) of the federal government, on Monday in Abuja. Oloworaran said the commission is working effortlessly to ensure that challenges such as application downtimes are resolved. She also said a new and more efficient enrolment application that will provide a user-friendly and seamless experience for users has been developed. “At the National Pension Commission (PenCom), we hold firmly to our statutory responsibility of ensuring a seamless pre-retirement verification and enrolment process for employees of federal government treasury-funded MDAs,” Oloworaran said “Each year, we embark on this exercise to gather accurate data for determining the Accrued Pension Rights of prospective retirees, so that the federal government can make the necessary budgetary provisions. “Today’s session is not just a routine gathering; it is part of PenCom’s commitment to building the capacity of stakeholders, specifically you, the Pension Desk Officers, whose roles are indispensable in this process. “This workshop aims to equip you with the skills and knowledge needed to effectively use the application and address any challenges that arise during the enrolment process. “We are also here to confront the issues of the past head-on.” 'THERE WERE GAPS IN PREVIOUS ENROLMENT' She further said in previous enrolment exercises, gaps and challenges were observed. The PenCom DG added that the workshop will provide practical solutions and clarity on the modalities for the upcoming 2025 enrollment. “We understand that some challenges, like application downtimes, have occasionally hindered the process, particularly during last-minute rushes,” she said. “I am pleased to inform you that we are actively working on developing a new, more efficient enrolment application that will provide a user-friendly and seamless experience for all stakeholders." Oloworaran also reassured that the commission is committed to continuously improving service delivery across the pension industry. The PenCom boss said despite some setbacks, including delays in the release of funds for retirees’ accrued rights, she’s confident that these issues will soon be resolved. “Today is not just about resolving technical issues; it is also about reaffirming our shared responsibility to Nigeria’s retirees, who deserve timely and seamless access to their benefits,” she added. Oloworaran also said significant progress has been made by all critical stakeholders to clear the outstanding pension liabilities and put in place long-term solutions that will prevent future delays in funding.

The National Pension Commission (PenCom) has granted pension fund administrators (PFAs) full authority to approve and process several categories of retirement benefits without prior clearance from the commission.

PenCom said the new directive, set to take effect from June 1, aims to cut bureaucratic bottlenecks and speed up pension disbursements under Nigeria’s contributory pension scheme (CPS).

PenCom announced the directive in a circular dated March 12, 2025.

According to the statement, 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.

To ensure efficiency, PenCom said PFAs must process and approve payments within two working days of completing necessary documentation.

“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 statement reads.

“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.”

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).

Despite the changes, 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.

FIVE REGULATORY FRAMEWORK AMENDED BY PENCOM

To support the transition, PenCom has revised five key regulatory frameworks, aiming to ensure retirees can access their benefits more quickly and without prolonged approval delays.

1. Revised regulation on the administration of retirement and terminal benefits – PFAs no longer need to submit retirement benefit approvals to PenCom.

“Pension Fund Administrators shall process and approve requests for all retirement payments after the completion of necessary documentation and verification of the retiree or legal beneficiary(ies),” the circular said.

2. Guidelines on voluntary contributions – PFAs can now process voluntary contribution withdrawals without forwarding requests to the commission.

“Pension Fund Administrators shall process and approve requests for Voluntary Contributions withdrawal from an applicant,” PenCom said.

3. Guidelines on accessing RSA balances for residential mortgages – PFAs now have the authority to approve equity contributions for homeownership.

“Pension Fund Administrators shall process and approve requests from RSA holders accessing their RSA balances to pay equity contributions for a residential mortgage,” the commission added.

4. Framework on additional benefits for existing retirees – PFAs can now process additional benefits requests independently.

5. Framework on pension enhancement for retirees on programmed withdrawal – PFAs can now approve pension enhancements without PenCom’s intervention.