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The National Pension Commission (PenCom) has announced that effective from March 2020, companies, with no insurance covers for their staff, would no longer be allowed to do any government business.

PenCom disclosed this in its recently issued compliance guidelines on Life Insurance Policy for employees and submission of insurance certificate for 2020.

How to manage your life insurance policy

It noted that the deadline was issued because of the low number of companies that have insurance covers for their staff. PenCom noted that the new regulation was to ensure that the companies open appropriate pension accounts for the workers.

According to the PenCom’s latest annual report on the submission of group life insurance certificates for the year 2018, only 172 employers obtained the group life insurance policy for a total of 39,946 employees in compliance with the Pension Reform Act 2014.

“In compliance with the PRA 2014, a total of 172 employers of labour covered under the Contributory Pension Scheme submitted their certificates of group life insurance policy covering over 39,946 employees in the year under review.

“A breakdown of the 172 GLIPs submitted showed that 168 employers were from the private sector while the others were from self-funded FGN agencies,” the report seen by Nairametrics read in part.

[READ MORE: PenCom to offer bonds, offset arrears)

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Why this matters: In line with PenCom’s directive as stipulated in the Pension Reform Act 2014, companies that do not have insurance certificates would not be allowed to bid or solicit for contract or business from any Federal Government ministries, departments and agencies.

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“In that regard, the commission issues annual pension clearance certificate to eligibility organisations. The MDAs are reminded to ensure that only pension clearance certificates issued by the commission are accepted as evidence of compliance with the PRA 2014.”

Included in the new directive, PenCom stated, “In accordance with the provisions of Section 4(5) of the  2014 and Section 5.5 of the guidelines for life insurance policy for employees, employers of labour covered by the PRA 2014 are required to submit copies of the insurance certificates with the schedule of benefits to the National Pension Commission.”

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