PenCom Orders PFAs, PFCs to Approve and Pay Pension Benefits Within Three Days.
The National Pension Commission (PenCom) has issued a directive requiring Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) to process and disburse pension benefits within three working days of receiving applications from eligible applicants.
Effective June 1, 2025, PFAs will no longer need to seek approval or obtain a “No Objection” from PenCom before processing and disbursing benefits such as programmed withdrawal, retiree life annuity, and temporary loss of employment benefits.
Faster Pension Processing Timeline
According to a circular released by PenCom on March 12, 2025, the new directive mandates:
PFAs to process and approve eligible applications within two working days of receiving complete documentation.
PFCs to disburse the approved benefits within 24 hours of receiving instructions from the PFAs.
This initiative aims to expedite the pension benefit payment process, ensuring quicker access to funds for Retirement Savings Account (RSA) holders.
Regulatory Oversight and Exceptions
Despite the streamlined process, PenCom emphasized that PFAs must still submit requests for approval in cases of:
- Depleted RSAs
- Death benefit applications
This is in line with Section 8(2) of the Pension Reform Act 2014.
Improved Service Delivery and Compliance Monitoring
PenCom stated that this policy is part of ongoing efforts to enhance operational efficiency and improve service delivery within the pension industry. The commission will monitor compliance using its regulatory technology platforms and supervisory mechanisms.
Previously, PFAs had to review, process, and forward all benefit applications to PenCom for approval before PFCs could disburse funds, leading to delays. The new policy eliminates this step, allowing retirees and RSA holders faster access to their entitlements.
Key Advisory for RSA Holders
PenCom advised RSA holders to submit necessary documentation on time to avoid delays. Prospective retirees should submit all required documents at least six months before retirement to ensure a seamless process.
The commission reassured stakeholders that regulatory measures will be enforced where necessary to uphold transparency, accountability, and the integrity of the pension system.
