The National Pension Commission (PenCom) has called for thorough scrutiny of all cases reported to Pension Fund Administrators about dead Retirement Savings Account holders before making payment to the beneficiaries.
The regulator, in a circular issued to all licensed PFAs on revised procedures on the processing of death benefits, warned the administrators that it would be held responsible if any beneficiary is unduly paid.
The circular read, “In the event of payment to wrong beneficiaries, PFA shall be liable and pay from its statutory reserve fund. The commission has received series of complaints from retirees, who alleged that their PFAs have wrongfully paid their benefits to their next of kin or legal beneficiaries, while they are still alive and in active service without their consent.
“Following these complaints and reports by the PFAs, it has become imperative to issue additional measures to curb these complaints and strengthen the processes and practices of processing and payment of death benefits.”
The agency said it expects the administrators to enhance the internal controls and carry out further investigation on the documentation submitted by the next of kin of the deceased before submission to the commission for approval.
According to PenCom, PFAs should ensure due diligence and conduct search at the probate registry of the issuing authority to confirm the genuineness of the documents, as well as the verification of the named administrator and sureties.
Background: PenCom had disclosed that some unidentified fraudsters under the disguise of being relatives of workers and retirees under the Contributory Pension Scheme had been approaching the PFAs to collect the pensions of contributors.
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The fraudsters, who had been deceiving the PFAs with fake documents, had successfully collected the pension benefits of some living workers and retirees after providing ‘evidences’ that they were dead.
However, many of such cases had continued to drag without being resolved.