The National Pension Commission has vowed to sanction Pension Fund Administrators over the spate of delays in the payment of pension benefits, among other related infractions.
The commission stated this in its ‘Revised regulation on the administration of retirement and terminal benefits.’
“A PFA that fails neglects or refuses to enlighten the retiree on the features of Programmed Withdrawal and Retiree Life Annuity to enable the retiree to make an informed decision shall be liable for an administrative sanction of N500,000,” the regulator stated in the revised regulation.
According to PenCom, a situation where a PFA delays the submission of a request for approval to the commission, for the payment of benefits to a retiree/beneficiary for more than 10 working days from the date of submission of relevant documents shall attract a penalty.
Specifically, the PFA will pay an administrative fine of N200,000, and N20,000 for every further day of delay thereafter
Where a PFA delays the payment of retirement benefits for up to five working days after receipt of no-objection from the commission, PenCom said the affected operator would pay an administrative fine of N200,000 and N20,000 for every additional day of delay thereafter.
The regulator stated, “A PFA and/or Pension Fund Custodian that pays retirement benefits without the commission’s prior no-objection shall pay an administrative sanction of N1m.
Read Also:
This is in addition to refunding either the principal amount so paid or lost investment income thereof, whichever is higher.”
According to PenCom, a PFA that pays an amount in excess of what is specified on the no-objection approval granted by the commission will be liable to refund of the overpaid amount and the investment income lost arising from the transaction, except where the difference is a residual amount or is as a result of the return on investment.
It stated that any PFA that pays an amount lower than that specified on the no-objection approval granted by the commission, would, in addition to paying the differential to the retiree, pay an administrative sanction of N500,000.
Any PFA that negligently submits to the commission, a request with incorrect information that is likely to result in an accelerated depletion of the RSA balance of a retiree, will pay an administrative sanction of N500,000,” it noted.
It added that the PFA would refund to the RSA both the amount that was overpaid and the lost investment income.
PenCom said any PFA that negligently submits to the commission, a request with incorrect information and later request the permission of the commission to resubmit the request, would pay an administrative sanction of N1m per RSA.
The regulator said, “Any violation of any provision of this regulation for which no sanction has been prescribed shall attract an administrative sanction of not more than N2m.
All sanctions in this regulation shall be charged to the operator’s profit and loss account and the burden shall not be transferred to the employees of the operators.”
