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CPS: As a contributor, make known your potential beneficiary

The Contributory Pension Scheme(CPS) by design from inception do not intend to make the process of assessment of pension benefits, either in life or in death cumbersome or difficult for the contributor or their beneficiaries.

This underscores why Pension Fund Administrators (PFAs) and the regulator, the National Pension Commission (PenCom) continually educate and enlighten participants in the scheme on the need to regularly update their personal datas.

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While some issues may be easy for the contributor to resolve when alive, it will not be the same when he or she is no more and beneficiary will now be faced with the burden of resolving identity issues that may come up.

The ongoing data recapturing in the pension industry provides a good opportunity for contributors to go and update their records with their PFAs, particularly letting their PFAs know who their beneficiaries will be in the event of the unexpected happening.

This will not only help the contributors and their beneficiaries, it will absolve the PFAs the blame and accruable penalty from the regulator for mistakenly paying the wrong beneficiaries.

According to the regulator, PFAs will henceforth be liable and pay from their statutory reserve fund in the event of payment of death benefits to wrong beneficiaries.

PenCom gave the warning in a recent circular entitled: ‘Addendum to the Circular on Reversed Procedures on the Processing of Death Benefits’ and signed by Ehimeme Ohioma, head, surveillance Department in PenCom.

The commission noted that the circular was issued to address certain challenges encountered by PFAs in the cause of implementing the procedures stipulated in the circular on Revised Procedures on the Processing of Death Benefits issued on October 3, 2018.

PenCom therefore mandated PFAs to collect detail information of nominated parent/guardian of a minor beneficiary and request beneficiaries to submit National Identification Number (NIN) slip/card or any valid means of identification other than voter’s card.

PFAs were also charged to play the role of a mediator in the event that they received two letters of administration or court orders from two named beneficiaries.

The CPS as provided in the Pension Reform Act 2014 recognises the importance of the contributor, his contribution and what happens to him while in employment and in retirement. This is both alive and in death. With this realisation that there is life and there is also death, the CPS has taken care of the contributor, directly or indirectly, should either of the two happen as long as the person has made his contribution through his employer.

Section one part 3 of the Pension Reform Act 2014 states that where an employee dies, his entitlements under the life insurance policy maintained under section 4(5) of this Act shall be paid by an underwriter to the named beneficiary in line with section 57 of the insurance Act.

That, upon receipt of a valid Will admitted to probate or a Letter of Administration, confirming the beneficiaries under the estate of the deceased employee, the Pension Fund Administrator(PFA) shall, with the approval of the Commission, release the amount standing in the retirement savings account of the decease to the personal representative of the deceased or to any other person as may be directed by a court of competent jurisdiction, in accordance with the terms of the Will or the personal law of the deceased employee, as the case may be.

In another case where an employee is declared missing and if is not found within a period of one year from the date he was declared missing, a board of inquiry is set up by PenCom, which concludes that it is reasonable to presume that he has died, and in this case, the provisions of this section shall apply.

When either of the two happens, the following process will be taken to pursue the benefit of the deceased.

•The Next-of-Kin and/or employer should notify the PFA of death of the employee/retiree

•The Next-of-Kin will also be required to provide a satisfactory means of identification such as current Driver’s License, International Passport, National Identity Card or letter of confirmation of identity from his/her bank

•A Next-of-Kin who cannot provide any of the means of identification stated above, may be identified by a 3rd party, who in addition to providing any of the satisfactory means of identification stated above shall also provide a sworn court affidavit identifying the claimant

•The PFA will forward a Death Benefit Withdrawal Application Forms to the survivor to complete. The forms are also available in all its offices nationwide, and can be downloaded from its website.

•The survivor will complete and return the Survivor Benefit Application forms to either head office of the PFA or to any of its branches nationwide. The completed application forms should be returned with a Letter of Administration or Will admitted to Probate and any of the listed documents below-Certificate of Death/Cause of Death; Certificate of Registration of Death; Police Report (if death is by accident); Burial Warrant issued by a Local Government Council; Evidence of Death/Burial issued by an Islamic Community Head or Judge of a Sharia Court; Evidence of Death/Burial issued by a Leader of a registered church; Copy of obituary poster (if any).

Modestus Anaesoronye


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