May 26, (THEWILL) – As the June 1, 2025 take-off date for enforcement of the new benefits approval process draws near, the Pension Commission of Nigeria (PenCom) will, as usual, leverage on technology to drive the regulation.
Pursuant to its powers under the Pension Reform Act 2014 (PRA 2014), to establish clear guidelines, standards, and procedures for administering retirement and terminal benefits under the Contributory Pension Scheme (CPS), PenCom in March, 2025 announced the review of procedures for retirement and terminal benefits payment for Retirement Savings Account holders by the Pension Fund Administrators (PFAs).
The new regulation, according to the Commission, will take effect from 1st June 2025.
In a circular addressed to all Licensed Pension Fund Operators, the Commission stated that it would no longer approve or grant ‘No Objections’ before payment of terminal retirement benefits for RSA holders by Pension Fund Operators under the Contributory Pension Scheme (CPS).
The new directive issued by the PenCom states that i. Effective from 1 June 2025, the Commission will no longer Approve or grant “No Objections” to the following benefits applications before the PFAs process them for payments, i.e Programmed Withdrawal; Retire Life Annuity; Access to Benefits upon Temporary Loss of Employment; and En Bloc Payments to retirees whose RSA balances cannot provide a reasonable pension.
Similarly, Pre-Pension Reform Act Benefits Payments to retirees in the Private Sector; Voluntary Contributions; Payments to RSA holders towards payment of equity contributions for residential mortgages; as well as Payment of Nigeria Social Insurance Trust Fund (NSITF) Contributions to retirees whose NSITF contributions were transferred to their RSAs will have to follow the new directive for payment to be effected by the PFA.
Also, changes in the periodicity of pension payments; Resolution of Errors from employers’ remittances of pension contributions for Private Sector and Self-funding Agencies; and Refunds to persons exempted from participating in the CPS by the PRA 2014 were announced.
The directive further stipulated that 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, the Commission in copy.
PenCom added that the medium for forwarding instructions to the PFC for processing payments shall be the Shared Folders deployed by the Commission while the PFCs shall effect payment into the beneficiaries’ accounts within 24 hours upon receipt of instructions from the PFA.
It noted that PFAs shall continue to forward requests for approval to the Commission relating to depleted RSAs and death benefit applications in line with Section 8 (2) of the PRA 2014.
The apex pension regulatory body further stated that in order to facilitate the implementation of the above directives, the Commission has approved the amendment of the relevant regulatory instruments on benefits administration.
While the new regulation aimed at facilitating the management and administration of the CPS towards abridging any frustrations experienced by the beneficiaries, and boost confidence in the scheme, PenCom’s penchant for technology would, evidently, play an important role in monitoring the process.
“Those who create bottlenecks at the receiving end of the process will no longer enjoy the luxury of business as usual which often leads to frustrations and delays on the part of the retirees,” said Ben Akalonu, a Pension Policy and Administration analyst.
Akalonu further stated that the new regulation would expand the role of technology in the management and administration of pensions in the country which has been a cause for joy among beneficiaries of the system.
Amid prevailing economic hardship across the country, PenCom has embraced tech-driven initiatives in its regulation of the pension industry. This is in pursuit of its mandate of ensuring that retirement benefits are paid as and when due – a measure that also enhances financial inclusion.
Evidently, the reform policies of the Bola Tinubu-led government have thrown up unintended consequences of closure of businesses and loss of jobs across sectors, which has put pressure on the assets of the CPS.
In response, PenCom has risen up to the challenge. According to the apex pension regulator, effective regulation of the industry demands accelerated adoption of appropriate technology in all aspects of the Commission’s activities – from enrollment through oversight functions to payment of retirees’ benefits.
At a media engagement in Lagos last December, the Director-General of PenCom, Ms Omolola Oloworaran revealed that the Commission was not slacking in its adoption of technological initiatives as pressure mounts on the agency.
“Technology has become the backbone of transformation across all sectors, and the pension industry is no exception. At PenCom, we have embraced this transformation wholeheartedly.
“Today, we have over 10.5 million contributors and oversee pension assets in excess of 21.9 trillion naira as of October. This progress demonstrates the strength of our contributory pension system, but we are not without challenges.
“Inflation, for instance, continues to erode the purchasing power of pensioners, and we are actively seeking innovative solutions to address this issue,” Oloworaran said in her address at the occasion, with the theme, ‘Tech-Driven Transformation: Shaping the Pension Landscape.’
Among the automated processes in the Commission’s tech-driven initiatives include the E-Pension Clearance Certificate (EPCC). This is aimed at improving the turn-around time for issuing PCC, engender transparency and promote ease of doing business.
The Commission automated the process by developing the e-Pension Clearance Certificate Application which has the following Modules: Employer Module, Pension Fund Custodian Module,and the PenCom Module.
PenCom recently disclosed that it successfully recovered a total of N1.58 billion from defaulting employers through intensified compliance and enforcement mechanisms – made possible by technology. This was made known by the Director General of PenCom, Ms. Omolola Oloworaran, in Kano during the First Run 2025 Consultative Forum for States and the Federal Capital Territory (FCT).
According to PenCom, Nigeria’s pension industry has invested a total of ₦5.51 trillion in asset classes targeted at supporting long-term financing for the country’s real sector growth.
This was disclosed during a high-level meeting between PenCom officials and a visiting International Monetary Fund delegation, which held discussions as part of the IMF’s 2025 Article IV Consultations on April 7, 2025.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
