PenCom Rolls Out Sanctions For Delay In Payment Of Retirement Benefits, Others
The National Pensions Commission has rolled out series of sanctions that would be imposed on Pension Fund Administrators that fail to meet their obligations to Nigerian retirees.
The move is part of measures adopted by PenCom to sanitize the sector from abuse by PFAs as well as beneficiaries.
Retirement Savings Account (RSA) holders in Nigeria are experiencing delays in the payment of their benefits as a result of bureaucracy in pension administration.
Nigeria’s pensions assets had risen astronomically to N13.42trn, according to figures released by PenCom.
According to the ‘Revised Regulation on the Administration of Retirement and Terminal Benefits’, seen by THE WHISTLER, PenCom said sanctions await PFAs that fail to meet with the new requirements.
It said, “Where a PFA delays the submission of a request for the payment of benefits by a retiree/beneficiary(ies) to the Commission for approval for more than 10 workingdays from the date of submission of relevant documents, it shall pay an administrative sanction of N200,000.00 and N20,000.00 for every further day of delay thereafter.
“Where a PFA delays payment of retirement benefits for up to five working days after receipt of no-objection from the Commission, it shall pay an administrative sanction of N200,000.00 and N20,000.00 for every day of delay thereafter.
“A PFA that fails, neglects or refuses to enlighten the retiree on the features of PW and RLA to enable the retiree to make an informed decision shall be liable for an administrative sanction of N500,000.00.”
Also, the Commission said a PFA and/or Pension Fund Custodian (PFC) that pays retirement benefits without the Commission’s prior no-objection shall pay an administrative sanction of N1,000,000.00.
PenCom said, “This is in addition to refunding either the principal amount so paid or lost investment income thereof, whichever is higher.
“A PFA that pays an amount in excess of that specified on the no-objection approval granted by the Commission shall be liable to refund the amount overpaid and investment income lost arising from the transaction, except where the difference is a residual amount or as a result of return on investment.
“Any PFA that pays an amount lower than that specified on the no-objection approval granted by the Commission, shall, in addition to paying the differential to the retiree, pay an administrative sanction of N500,000.00.
“Any PFA that negligently submits to the Commission, a request with incorrect information that is likely to result in accelerated depletion of the RSA balance of a retiree, shall pay an administrative sanction of N500,000.00. In addition, the PFA shall refund to the RSA both the amount that was overpaid and the lost investment income.”
Also, PenCom said there would be a periodic pension enhancement for retirees on Programmed Withdrawal (PW) based on the Return on Investment of funds in the RSA and the Commission’s directive.
According to PenCom, retirees with a minimum of five per cent growth in their RSAs, from the date of initial programming or their last enhancement date, would be entitled to receive enhanced pensions.