The National Pension Commission (PenCom) has instituted stringent measures to ensure that Pension Fund Administrators (PFAs) comply with regulations and prioritize the welfare of retirees. These measures include administrative sanctions aimed at promoting transparency, accountability, and the efficient management of pension benefits.
Under these regulations, PFAs are required to enlighten pensioners about various features of retirement benefits, including programmed withdrawal and retirement life annuity (RLA). Failure to do so may result in a fine of N500,000.
Additionally, if a PFA delays the payment of retirement benefits for up to five working days after receiving no-objection from the commission, it will face an administrative sanction of N200,000, with a daily delay penalty of N20,000 thereafter.
PFAs and/or pension fund custodians (PFCs) that pay retirement benefits without prior no-objection from the commission will face an administrative sanction of N1,000,500, in addition to refunding the principal amount paid or lost investment income, whichever is higher.
If a PFA pays an amount higher than specified in the no-objection approval granted by the commission, it must refund the excess amount and any investment income lost. Conversely, if a PFA pays an amount lower than specified, it must pay the differential to the retiree and face an administrative sanction of N500,000.
PenCom also stated that PFAs would face a N500,000 administrative sanction for negligently submitting requests with incorrect information likely to accelerate the depletion of a retiree’s Retirement Savings Account (RSA) balance.
Further, any delay in the submission of requests for the payment of benefits by a retiree/beneficiary to the commission may result in an administrative sanction of N200,000, with an additional N20,000 for each day of further delay beyond 10 working days.
Violations of any provisions of the regulation not covered by specific sanctions may result in an administrative sanction of up to N2,000,000. Importantly, all sanctions will be charged to the operator’s profit and loss account, and the burden will not be transferred to the employees of the operators.
