Pension benefits, the hurdle before beneficiaries
The nation’s Contributory Pension Scheme (CPS) since inception in 2004 through the Pension Reform law as amended in 2014 took into cognizance the importance of access to benefits whether the contributor is dead or alive. MODESTUS ANAESORONYE looks at what beneficiaries go through.
Sometimes pension benefits are left unclaimed after a contributor dies. This is an unfortunate situation under any circumstance, but especially now when many people are struggling financially. So, it would be saddening that after all your efforts to build your pensions, and when you are not there your beneficiaries are denied access or could not qualify to claim the benefits.
What is more, this is an easily preventable outcome. Yes, it is preventable:
The Contributory Pension Scheme (CPS) recognises the importance of the contributor, his contribution and what happens to him while in employment and in retirement. This is both at life 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 deceased 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 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.
STEPS TO TAKE:
•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:
1. Certificate of Death/Cause of Death
2. Certificate of Registration of Death
3. Police Report (if death is by accident)
4. Burial Warrant issued by a Local Government Council
5. Evidence of Death/Burial issued by an Islamic Community Head or Judge of a Sharia Court
6. Evidence of Death/Burial issued by a Leader of a registered church
7. Copy of obituary poster (if any)
Where an active contributing member or a retired member who is already on programmed withdrawal or regular pension list is declared missing, the conditions for benefits under the death ground will be applicable.
STEPS TO TAKE:
•The Next-of-Kin and/or employer will notify the PFA of the disappearance of the employee/retiree. Such notification will be after a minimum period of 12 months following the disappearance of the missing person
•The Next-of-Kin will provide a satisfactory means of identification such as current Driver’s Licence, 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 means of identification stated above, shall provide a sworn court affidavit identifying the claimant
•The PFA will issue the Next-of-Kin, a Death Benefit Withdrawal Application form and demands the following documents as evidence that the employee/retiree is missing:
•A Police Report confirming that the person has been missing with effect from the reported date, and that the person has not been found after 12 months
•Letter of confirmation from the employer (if in active employment at the time of disappearance) also bearing the passport photograph of the missing person
•Newspaper publication announcing the disappearance of the person
•A Letter of Administration or Will admitted to Probate
•The Next-of-Kin will submit the completed death benefit withdrawal application form together with the required documents to the PFA head office or through any of its branches nationwide.
While this law is there to enhance the welfare of the contributor, there are a number of challenges that beneficiaries would have to contend with if there was no prior effort to address them before death occurs. This is the issue of not having a Will and dying intestate.
Experts say one of the challenges which families of the deceased pension contributor faces after the death of their loved one is the process of claiming his pension entitlements, making it important that a pension contributor should procure a ‘Will’ for management of his or her estate should the unexpected happen.
A will is the most practical first step in estate planning and makes clear how you want your property to be distributed after you die. It is simply a written declaration or statement by a person (the “Testator”) naming one or more persons, human or entity, as beneficiaries of his/her property after death. Another person or persons are also named in the Will as executors of the Estate with property to be distributed after the Testator’s death.
Writing a will can be as simple as typing out how you want your assets to be transferred to loved ones or charitable organizations after your death. If you don’t have a will when you die, your estate will be handled in probate, and your property could be distributed differently than what you would like.
It may help to get legal advice when writing a will, particularly when it comes to understanding all the rules of the estate disposition process.
A will must be written in sound judgment and mental capacity to be valid; the document must clearly state that it is your will. An executor of your will, who ensures your estate is distributed according to your wishes, must be named; It is not necessary to notarize or record your will but these can safeguard against any claims that your will is invalid and to be valid, you must sign a will in the presence of at least two witnesses.
But where someone dies without making a will, they are said to have died ‘intestate’. If this happens, the law sets out who should deal with the deceased’s affairs and who should inherit their estate including property, personal possessions and money, as well as his pensions.