PenCom Introduces New Policy For Faster Pension Benefit Payments.
The National Pension Commission (PenCom) has announced a new policy aimed at expediting pension benefit payments for retirees. The policy, set to take effect from 1 June 2025, eliminates the need for Pension Fund Administrators (PFAs) to obtain PenCom’s approval before processing and disbursing benefits.
Key Highlights of the Policy:
– Faster Processing: PFAs will no longer require PenCom’s approval before processing pension payments, significantly reducing delays.
– Quicker Application Handling: PFAs must process eligible applications within two working days once all necessary documents are submitted.
– Swift Benefit Payments: Pension Fund Custodians (PFCs) are mandated to release approved benefits within 24 hours of receiving instructions from PFAs.
– Advance Documentation: Retirement Savings Account (RSA) holders are advised to submit their retirement documents to their PFA at least six months before retirement to ensure seamless processing.
Understanding Key Pension Terms:
– PFA (Pension Fund Administrator): Responsible for managing and administering pension funds on behalf of employees.
– PFC (Pension Fund Custodian): Typically banks, these institutions hold pension funds and ensure payments are made as instructed by PFAs.
– RSA (Retirement Savings Account): An individual pension account where monthly contributions are saved for retirement.
This policy is expected to enhance efficiency in pension disbursements, ensuring that retirees receive their benefits in a timely and hassle-free manner.