The National Pension Commission (PenCom) and the National Insurance Commission (NAICOM) have issued new guidelines clarifying how additional pension inflows should be managed for retirees under annuity schemes. The move aims to strengthen transparency, fairness, and compliance in the administration of retirement benefits.
The directive, conveyed through a joint circular to Pension Fund Administrators (PFAs) and Retiree Life Annuity (RLA) providers, outlines detailed procedures for handling extra contributions or remittances into the Retirement Savings Accounts (RSAs) of retirees.
According to the regulators, the clarification follows several complaints from retirees about inconsistencies in the implementation of the Revised Regulation on Retiree Life Annuity (RLA) 2020.
PenCom and NAICOM explained that the guideline is intended to ensure that retirees receive the full value of their pension savings while promoting uniform practices across the industry.
“This clarification is necessary to protect retirees and ensure uniform application by all operators,” the statement read.
Under the new rules, PFAs are required to immediately notify retirees whenever additional payments or inflows are made into their RSAs. This, the commissions said, is part of ongoing efforts to enhance transparency and keep retirees fully informed about transactions in their accounts.
For inflows of ₦100,000 or less, PFAs must pay the amount directly into the retiree’s designated bank account.
For inflows above ₦100,000, the PFA must first determine whether the retiree’s existing annuity provides at least 50 percent of their final salary before retirement.
However, If the annuity equals or exceeds 50 percent, the rules mean that a retiree may choose to receive the entire inflow as a lump sum or use it as an additional premium to purchase a higher annuity from their current provider.
In addition, If the annuity is below 50 percent: The retiree must apply all or part of the inflow to raise their annuity up to the 50 percent threshold. Any remaining balance may then be taken as a lump sum or used to buy an additional annuity.
PenCom and NAICOM emphasised that all licensed PFAs and RLA providers must ensure full and immediate compliance with the directive.
“Operators are expected to ensure prompt implementation of these guidelines,” the circular warned.
The regulators added that the joint directive underscores their commitment to protecting retirees’ interests, promoting consistency in pension administration, and strengthening public confidence in Nigeria’s retirement benefit system.
