“A bird that flies off the earth and lands on an anthill is still on the ground.” — African Proverb
This proverb reminds us that not all changes are transformational. But every once in a while, a policy shift truly redefines the terrain. The March 2025 directive from the National Pension Commission (PenCom) may be one such moment — not just for pensioners, but for business leaders, HR professionals, and the future of workforce governance in Nigeria.
“Moreover, while PenCom has not relinquished its regulatory role, the onus is now on employers and employees to engage with the new system proactively.”
The shift: Decentralising pension approvals
Effective June 1, 2025, the Commission will cease direct approvals for a broad range of benefits under the Contributory Pension Scheme (CPS). Pension Fund Administrators (PFAs) will now process and approve benefits directly — from lump-sum retirement payouts to 25 percent withdrawals by unemployed workers, mortgage equity contributions, voluntary contributions, and pension enhancements. The only exclusions are depleted RSAs and death benefit claims, which still require PenCom’s sign-off.
This is not a minor procedural change. It’s a recalibration of authority and accountability within Nigeria’s pension framework.
The Why: From bureaucracy to efficiency
For years, pensioners and RSA holders navigated a sluggish system where every benefit application crawled from PFAs to PenCom, sometimes taking months. Real people — retired lecturers, unemployed executives, and low-income workers — were left stranded while approvals stalled in bureaucratic corridors.
PenCom’s new directive, anchored in Section 55(f) and (g) of the PRA 2014, decentralises these approvals to restore dignity, timeliness, and responsiveness to pension administration. PFAs must now act within two working days, and Pension Fund Custodians (PFCs) must disburse payments within 24 hours thereafter.
Read also: PenCom to recover N1.3bn unpaid pension contributions for journalists
Strategic implications for HR and business leaders
1. Talent mobility just got easier
Employees who lose their jobs can now access 25 percent of their RSA funds almost immediately. This seemingly minor tweak could disrupt talent dynamics. Middle-level professionals with moderate RSA balances may now feel emboldened to resign without fearing financial limbo — raising the urgency for HR to rethink retention and employee value propositions.
2. From compliance burden to operational agility
Previously, employers correcting pension remittance errors had to wait for PenCom to validate refunds — a process that bred penalties, audit flags, and employee frustration. The new directive allows employers to deal directly with PFAs. This could cut down on compliance lead times and improve HR-finance alignment.
3. Enhanced workforce planning and exit management
With PFAs empowered to process lump sums, annuities, and voluntary contributions, retirement transitions may now happen more smoothly. Organisations can now integrate retirement readiness into workforce planning, ensuring better succession pipelines and minimising the human cost of exit delays.
4. Mortgage equity access: New frontiers in housing benefits
The directive simplifies access to pension-backed mortgage equity. Employers can now embed homeownership schemes into their benefit offerings — particularly attractive to younger professionals with long retirement horizons.
Risks, responsibilities, and reinforcements
The directive brings speed but also shifts responsibility and risk downstream to PFAs. HR leaders must now build closer monitoring relationships with their PFAs to ensure timelines, data accuracy, and compliance. Organisations will also need clear internal protocols to guide employees on documentation and access.
Moreover, while PenCom has not relinquished its regulatory role, the onus is now on employers and employees to engage with the new system proactively.
What next for HR?
This is a call for strategic adaptation, not passive compliance. Forward-looking organisations should consider:
· Running pension education workshops for staff on the new access windows
· Auditing their pension remittance processes to catch legacy errors
· Updating HR policies and offboarding checklists to reflect the new benefits structure
· Reevaluating employee benefits holistically, using the pension account as a financial planning tool
Closing thought
When a river changes course, the wise do not just watch — they remap the journey. The new PenCom directive is more than a regulatory shift; it is an opportunity for HR to drive trust, efficiency, and financial empowerment at the workplace.
Let us not merely land on the anthill. Let us build higher ground.
Dr Olufemi Ogunlowo is CEO of Strategic Outsourcing Limited and writes on the intersection of technology, talent management, and organisational transformation for BusinessDay.
