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Dead workers’ relatives get N40bn pension claims

By on April 28, 2014

No fewer than 14,860 relatives of deceased workers have demanded for N40.9bn benefits since the inception of the Contributory Pension Scheme, records available atthe National Pension Commission have shown.

Statistics gleaned from a document prepared by PenCom show that this figure includes the pension benefits paid out and the group life insurance policy under the Pension Reform Act 2004.

The GLIP is a law under Section 9(3) of Pension Reform Act 2004 which mandates employers with at least five employees to have it.

If an employee dies while in active service, the insurance company will pay his beneficiary three times his annual emolument if the policy is in place.

According to the records, on approval of death benefits by the commission, 12,789 were families of male deceased workers while 2,071 relatives of female deceased workers also laid claims for pension benefits.

The commission noted that there had been an increase in the number of retirees under the Contributory Pension Scheme.

In the document, the Acting Director-General, PenCom, Mrs. ChineloAnohu-Amazu,  said there was a need for the Pension Fund Administrators to continue to create awareness on the CPS.

She said the retirees have a right to choose the retirement option that they want among programmed withdrawal and annuity.

On the rights of the retirees, Anohu-Amazu stated that they could transfer their Retirement Savings Account from one PFA to another when the window of transfer opens.

According to her, the PFAs have the obligation to send periodic statement of account to the contributors and pay the retirees pensions as at when due by direct payment to their bank accounts.

For retirees that want to take the annuity, the PenCom boss explained that they need to provide provisional agreement from a life insurance company to the PFA for the purchase of annuity.

Other things the retiree would need to provide, she explained, included contact address after retirement; details of next of kin; details of bank account for receiving retirement benefits and other documents required by the PFA.

She pointed out the role of the PFAs to file a request with the commission for any retiree changing from annuity; issue payment instructions to the Pension Fund Custodian for lump sum and instruct the PFC to effect payment of annuity premium.

According to her, the commission issues general regulations and guidelines to the PFAs and approves benefits withdrawal arrangement or change of PFA.

PenCom also monitors PFAs for compliance, regulates and supervises the operators to ensure accurate, timely payment of retirees funds as at when due.

Anohu-Amazu expressed worry over the limited public awareness of the workings of the CPS.

She also observed that there was inadequate communication enlightenment of RSA holders by the PFAs.

“We will continue to increase awareness on the CPS, and ensure commitment to establishing strong corporate governance in the industry and improve quality of service delivery,” she said.

The regulator added that the computation of benefits under the old pension scheme was different from the new scheme.

 

 

[Punch]