REVISED REGULATION ON RETIREE LIFE ANNUITY PURSUANT TO THE PENSION REFORM ACT 2014
Act · Finance
Policy date: 2014-01-01
Regulations govern the purchase and management of retiree life annuities, providing guaranteed lifetime income from pension savings. They target retirees, life insurance companies, and pension administrators to ensure transparency and financial stability. This secures income for retirees choosing this option.
REVISED REGULATION ON RETIREE LIFE ANNUITY PURSUANT TO THE PENSION REFORM ACT 2014
What Is This Policy?
PenCom regulations governing the purchase and management of Retiree Life Annuity (RLA) products, which provide retiring members with guaranteed lifetime monthly income in exchange for their RSA balance.
Who Does It Target?
Retirees choosing the life annuity option for their pension benefits Licensed life insurance companies offering RLA products PenCom and NAICOM as dual regulators PFAs facilitating the annuity purchase process
What Does It Aim to Achieve?
Ensure retirees who choose the annuity option receive guaranteed lifetime income, that annuity providers are financially sound, and that the annuity product terms are transparent and fairly priced.
Key Features
Product Standards: Defines minimum benefit terms for RLA products including guaranteed payment periods and inflation adjustment. Insurer Requirements: Only life insurance companies licensed by NAICOM and approved by PenCom may offer RLA products. Purchase Process: Prescribes how retirees shop for annuities, including minimum number of quotes that must be obtained. Financial Strength: Sets minimum financial strength and capital adequacy requirements for RLA providers.
Current Status
Rollout Stage: Active Coverage: All retiring RSA holders who elect the annuity option Beneficiaries: Retirees seeking guaranteed lifetime income Funding: Funded by RSA balance transferred to insurance company
How to Access
Retirees must obtain quotes from at least three PenCom-approved annuity providers The purchase decision is irrevocable once made Annuity payments commence within the period prescribed after purchase Application method: Through your PFA who will facilitate the annuity quote and purchase process.
Important Terms
The annuity option is final and cannot be reversed Death benefits to nominated beneficiaries are governed by the specific annuity policy Annuity amounts are quoted based on the RSA balance at retirement
Official Resources
Website: https://www.pencom.gov.ng Contact: National Pension Commission (PenCom) / NAICOM
Legal Framework
Issued under the regulatory powers of the National Pension Commission (PenCom) pursuant to the Pension Reform Act 2014. Annuity products are regulated under the Insurance Act and supervised in collaboration with the National Insurance Commission (NAICOM) under the NAICOM Act. Operates alongside the Pension Reform Act 2014, the Contributory Pension Scheme framework, and PenCom's investment regulations for Pension Fund Administrators.