The National Pension Commission (PenCom) and the National Insurance Commission (NAICOM) have issued a joint directive clarifying how additional inflows into the Retirement Savings Accounts (RSAs) of retirees under the Retiree Life Annuity (RLA) option should be treated.
According to the directive, if the additional inflow into a retiree’s RSA is less than ₦100,000, the amount can be paid directly into the retiree’s bank account, but only with prior approval from PenCom.
The directive further explains that when additional inflows exceed ₦100,000, the retiree is required to purchase a premium from their RLA provider before the amount can be transferred into the annuity. This ensures compliance with pension regulations and protects the financial interests of retirees, safeguarding their long-term benefits.
For retirees who opted for the Programmed Withdrawal (PW) option, any additional contributions into their RSAs must trigger a re‑programming of benefits. The Pension Fund Administrator (PFA) is required to recalculate the new pension payments and any available lump sum using a standardized template approved by PenCom, ensuring accuracy and transparency in the benefit computation.
PenCom emphasized that all additional inflows must receive prior approval from the Commission before any payment is made. The directive aligns with the Revised Regulation on the Administration of Retirement and Terminal Benefits, which provides detailed guidance to PFAs and retirees on handling extra contributions into RSAs.
The regulators stated that the directive aims to protect retirees and maintain the integrity of the Contributory Pension Scheme. By clearly distinguishing between RLA and PW options, the instruction ensures that retirees receive correct benefit calculations and that funds are not misused. Stakeholders, including retirees, PFAs, and insurance companies offering RLA products, are urged to comply promptly to avoid delays or penalties.
Finally, the Commission advised all parties to familiarize themselves with the new rules for smooth implementation. Retirees should verify whether additional inflows qualify for direct payment or must be used to purchase an annuity, while PFAs must ensure all computations and approvals follow the prescribed standards, reinforcing transparency and accountability in pension administration.
