Pension dependents’ contributors get N274bn death benefits in 5 years

Dependants of deceased pension contributors have received N274.34 billion as death benefits over the past five years.

The payment, which ran from 2020 to September 2024, was distributed among 45,976 beneficiaries, according to latest data released by the National Pension Commission (PenCom).

As established in the Pension Reform Act, contributors who die in the course of their work are entitled to their benefits through the group life insurance policy maintained by their employer, as well as balance in their Retirement Savings Account (RSA) managed by their Pension Fund Administrator (PFA).

Agudah Oguche, chief executive officer, Pension Fund Operators Association of Nigeria (PenOp), said the upward trend in the disbursement of death benefits over the years reflects both the increasing number of beneficiaries and a commitment to providing financial support to those who are entitled to it during times of loss.

The Nigeria Contributory Pension Scheme (CPS) introduced by the Pension Reform Act 2004 and revised in 2014 recognises the importance of the contributor, his/her contribution and what happens to him/her while in employment. This is both when there is life and in death.

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With this realisation that there is life and there is also death, the CPS has taken care of the contributors, directly or indirectly, should either of the two happen, as long as the person has made his or her contribution through his/her employer, the PenOp boss said.

Section 1 Part 3 of the Pension Reform Act 2014 states that where an employee dies, his or her entitlements under the life insurance policy maintained under Section 4(5) of the Act shall be paid by an underwriter to the named beneficiary in line with Section 57 of the Insurance Act.

However, controversies often arise after a contributor dies interstate, meaning passing without a valid will. This is where the journey to claiming the death benefits begins.

One of the challenges which families of the deceased pension contributors face is the process of claiming their pension entitlements.

This explains why pension contributors must procure the ‘will’ for the management of their estates should the unexpected happen, said Chika Onwunali, managing partner, Premium Debate.

A will is the most practical first step in estate planning and makes clear how anyone wants their properties to be distributed after death.

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.

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 the PenCom, which concludes that it is reasonable to presume that the person has died, and in this case, the provisions of this section shall also apply.