On the 12th day of March, 2025, the National Pension Commission [“PENCOM” or “the Commission”] by a circular, announced the introduction of a new directive, one that permits Pension Fund Administrators [“PFAs”] to process and disburse a wide array of retirement benefits, including Programmed Withdrawals, Retiree Life Annuities, and Temporary Loss of Employment benefits, to holders of Retirement Savings Accounts [“RSAs”] without getting prior approval from the PENCOM.

The benefits payments for which PFA do not need to seek prior approval from Commission in the circular include:

• Programmed Withdrawals; Retire Life Annuities;
• Access to Benefits upon Temporary Loss of Employment;
• En Bloc Payments for retirees whose RSA balances cannot provide a reasonable pension;
• Pre-Pension Reform Act Benefits Payments for private sector retirees;
• Voluntary Contributions;
• Payments towards Residential Mortgage Equity Contributions;
• NSITF Contributions for retirees whose contributions were transferred to their RSAs;
• Changes in Pension Payment Periodicity; Resolution of Errors from employers’ remittances; Refunds to persons exempted from the CPS. 

This is effective from the 1st of June, 2025.

Starting from the effective date, PFAs are mandated to process and approve eligible benefit applications within two working days upon receiving all required documentation. Subsequently, Pension Fund Custodians [PFCs] are also to ensure the payment of these approved benefits within 24 hours of receiving instructions from the PFAs. 

To facilitate the implementation of these changes, the Commission has approved amendments to five regulatory instruments governing benefit administration. These consequential amendments affect the:

• Revised Regulation on the Administration of Retirement and Terminal Benefits (amendment to provisions now mandates the PFAs will now process and approve retirement payments without Commission oversight);
• Guidelines on Voluntary Contributions (amended sections will see PFAs independently handle withdrawal and transfer requests);
• Guidelines on Accessing RSA Balances for Residential Mortgages (amendment to its provisions will see PFAs process and approve mortgage-related requests);
• Framework on Additional Benefits for Existing Retirees (PFAs will now process and approve additional benefits requests using additional benefits template); and
• Framework on Pension Enhancement for Existing Retirees (its amended provisions will now see PFAs compute and approve enhanced pensions without Commission’s intervention).

Although the new directive, effective from 1st June, grants PFAs greater autonomy, certain benefit applications, particularly requests related to depleted RSAs and death benefit applications, as stipulated under section 8 (2) of the Pension Reform Act 2014 [“PRA 2014”], will still require Commission’s approval

This initiative aims to enhance operational efficiency and service delivery within Nigeria’s pension system, ensuring that retirees can access their entitlements more promptly.