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PenCom discontinues Employee Death Benefit Account  

PenCom has discontinued Death Benefits Account (DBA) for deceased employees under the contributory pension scheme.

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PFAs make N1.69 trillion ROI , Pension Contributions in Nigeria rose by N169.9 billion in 3-month , PenCom calls for thorough scrutiny of dead RSA holders’ benefits, PenCom discontinues Employee Death Benefit Account  , PFAs boost investment in infrastructure by N17.77 billion in one year , Pension: Low RSA balances - a subtly growing concern, PENCOM boss queried for spending unapproved funds, N5 billion on 360 staff in 8-month , How negative performance in the capital market affected PFAs in 2019, PenCom seeks pension bonds to clear N400 billion arrears as retirees groan, PenCom set to offer pension bonds to offset unpaid pension arrears, Is the pension asset just another cookie jar?, PenCom threatens companies with no insurance covers for their staff , PENCOM Notifies RSA holders on the mandatory data recapture exercise

The National Pension Commission (PenCom) has discontinued Death Benefits Account (DBA) for deceased employees under the contributory pension scheme.

According to the notice issued by the regulator, the processing of DBA for claims is going to be discontinued with effect from 1 February 2020. All Pension Fund Administrators (PFAs) have been directed to stop the opening of DBAs effective from 31 January 2020.

Prior to the Pension Reform Act (PRA) 2014, Death Benefits Account (DBA) was used by legal beneficiaries to access the benefits of the deceased employees who did not open RSA during their lifetime. However, pursuant to the above-cited statutory provisions, this practice is no longer valid.

PenCom bars PFAs from collecting bond’s brokerages fee  

The Pension Reform Act Section 11(1) mandates every single eligible employee to maintain a retirement saving account (RSA) with a PFA of his/her choice. The act also mandates every employer to open a nominal RSA within 6 months of assumption of duty for an employee who fails to open an RSA in accordance with section 11(5) of the PRA 2014. Employers are therefore required to ensure that RSAs are opened for all their employees.

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In recent development, which was published on Nairametrics, the regulator called for thorough scrutiny of all cases reported to Pension Fund Administrators about dead Retirement Savings Account holders before making payment to the beneficiaries. This came in the light 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.

[READ MORE: PenCom bars PFAs from collecting bond’s brokerages fee]

Meanwhile, the National Pension Commission was established in 2004 with the following objectives:

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  • to ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory or Private Sector receives his retirement benefits as and when due;
  • to assist individuals by ensuring that they save to cater for their livelihood during old age and thereby reducing old-age poverty;
  • to ensure that pensioners are not subjected to untold suffering due to inefficient and cumbersome process of pension payment;
  • to establish a uniform set of rules, regulations and standards for the administration and payments of retirement benefits for the Public Service of the Federation, Federal Capital Territory and the Private Sector; and
  • to stem the growth of outstanding pension liabilities.

Download the PenCom notice here.

2 Comments

2 Comments

  1. Abimbola Oluwabukola Akande

    November 9, 2019 at 6:41 pm

    Arising from the objectives of establishing CPS as stated above, when then do retiree wait for 3 to 4 years before assessing their benefits which was not so under old scheme (Pay as you go)
    Please see to this issue as a matter of urgency. People are dying and who then benefits thier labour?

  2. Charles

    November 10, 2019 at 7:52 pm

    Hello Abimbola it’s only when the acrude benefits has not enter the retiree after he or she has completed the retiree verification that delays often occur apart from the scenario above one get his or her pension as and when due.

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Corporate Press Releases

elev8 launches new Nigeria Academy, to host event series on Nigeria’s digital future

The event will bring together experts in business, digital technology and economic development to amplify Nigeria’s digital dialogue.

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Global technology training company elev8 is delighted to announce the launch of its new academy in Lagos with a series of online events focused on digital transformation in Nigeria.

The Knowledge-based Economy – A Pathway to Nigeria’s Digitally Enabled Future is an opportunity for business leaders to participate in Nigeria’s digital dialogue with industry experts, technology trailblazers and government leaders.

C-suite executives and digital leaders across the country are invited to join elev8 for a special series of events exploring the impact of new technologies and digitalization, as well as the potential risks to economic growth, such as Covid-19.

Digital enablement is increasingly becoming a hot topic for global businesses. In the next few years, the digital economy is projected to be responsible for a quarter of global GDP.

Across the world, businesses are accelerating digital adoption to establish a competitive edge, drive growth and ensure efficiency. For Nigeria to compete on the world stage, investment in new technologies and skills is essential in supporting a transition to a knowledge-based economy.

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Digital Event: The Knowledge-based Economy – A Pathway to Nigeria’s Digitally Enabled Future

30 November – 3 December

The event will commence with the release of a cutting-edge research report on November 30. Produced in conjunction with BusinessDay Research and Intelligence Unit.

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The report examines the impact of digital transformation on Nigeria’s economic growth over the next three years.

On December 1, participants will gain valuable insight on the digital strategies and tactics deployed by leading market players in an exclusive masterclass, Digitize or Die, hosted by award-winning technology and digital innovator, Sabine VanderLinden.

The event will close on Thursday, December 3 with a live digital dialogue, featuring an expert panel of digital specialists, government figures, and business leaders, looking at the ways that digitization will impact Nigeria’s economic development.

To find out more, or register for the event, please visit: www.elev8me.com/nigeria20

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Companies

ValuAlliance distributes value fund of N10 per unit for H1, 2020

ValuAlliance Value Fund has declared the distribution to unit holders, the sum of N10.00/unit for the financial year ended June 30, 2020. 

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ValuAlliance Value Fund (“Value Fund” or the “Fund”), formerly called the SIM Capital Alliance Value Fund, has declared the distribution to unit holders, the sum of N10.00/unit for the financial year ended June 30, 2020. 

This is according to a notification by the firm, sent to the Nigerian Stock Exchange market and seen by Nairametrics.

The latest distribution indicates a decline of N1/unit when compared to its distribution in the corresponding period last year. 

(READ MORE: SEC reinstates DEAP Capital’s Board)

The key highlights of the recent notification include:

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  • Annual General Meeting Date: 21st December 2020 
  • AGM Venue: 33A Alfred Rewane (Kingsway) Road, Ikoyi, Lagos, Nigeria 
  • Proposed Distribution: ₦10/unit  
  • Qualification Date: 9th December 2020  
  • Closure of Register Date: 10th December 2020  
  • Payment Date: 23rd December 2020 

What you should know 

  •  The Value Fund is a closed-end Fund registered and regulated by the Securities and Exchange Commission (SEC), whose units are listed on the main board of the NSE. 
  • The Value Fund for the year ended June 30, 2020 achieved growth of 2.83% Year-on-Year, with a cumulative return of 125.32% since inception, which translates to a 9-year Internal Rate of Return (IRR) of 12.06%.

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Economy & Politics

Nigeria generates N416.01 billion from Company Income Tax in Q3 2020

Total company income tax generated increased by 3.48% in Q3 2020, compared to N402.03 billion recorded in Q2 2020.

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Avoid paying taxes

Nigeria generated the sum of N416.01 billion from Company Income Tax (CIT) in the third quarter of 2020. This was revealed in the Company Income Tax by Sectors report, recently released by the National Bureau of Statistics (NBS).

According to the report, the total CIT generated increased by 3.48% in Q3 2020, compared to N402.03 billion recorded in the previous quarter (Q2 2020). It reduced by 20.13% compared to N520.89 billion recorded in the corresponding quarter (Q3) of 2019.

Highlights

  • Company income tax generated year-to-date sums up to N1.11 trillion as against N1.26 trillion in the comparable period of 2019.
  • Professional Services including Telecoms generated the highest amount of CIT with N55.52 billion generated, closely followed by Other Manufacturing with N42.03 billion.
  • Banks & Financial Institutions generated a sum of N24.05 billion.
  • Mining generated the least, closely followed by Textile and Garment Industry and Local Government Councils with N120.93 million, N167.51 million, and N321.72 million generated respectively.

Out of the total amount generated in Q3 2020, N244.70 billion was generated as CIT locally, while N70.34 billion was generated as foreign CIT payment. The balance of N100.97 billion was generated as income taxes from other payments.

Automobiles and Assemblies grows CIT by 994%

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In terms of sectors with the highest increase in company income tax remittances, the Automobiles and Assemblies sector grew its CIT by 994%, from N81.6 million in Q2 2020 to N892.7 million. It was closely followed by the Gas sector, which grew its CIT by 626% to stand at N4.76 billion from N655.5 million.

On the flip side, transport and haulage services recorded the highest decline in company income tax, as it reduced by 76% to stand at N7.35 billion from N31.1 billion. This is closely followed by Banks and financial institutions, which declined by 51% to stand at N24.1 billion.

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Bottom line

The rise in company income tax is an indication of the Nigerian government’s move to improve the generation of revenue from the fiscal side as against oil exportation. However, the halt in economic activities due to the COVID-19 pandemic contributed to the year-on-year decline in company income tax.

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