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Home Business News

PenCom discontinues Employee Death Benefit Account  

Titobioluwa OkunadebyTitobioluwa Okunade
3 years ago
in Business News
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
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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 However, pursuant to the above-cited statutory provisions, this practice is no longer valid.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.

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:

  • 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.

Related

Tags: Death Benefits AccountNational Pension CommissionPension Fund Administrators

Comments 2

  1. Abimbola Oluwabukola Akande says:
    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?

    Reply
  2. Charles says:
    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.

    Reply

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