In order to improve the retirement benefit administration process and to enhance the comfort of pensioners, the National Pension Commission (PenCom) has defined roles for the different stakeholders in the system.
In addition to computing models for calculating programmed withdrawals, the regulator said it will set investment guidelines for active members and retirees’ funds while ensuring timely payments to retirees among other things.
The pension regulator said while retirees are to supply necessary information including the bank accounts they want their pensions to bepaid into, Pension Fund Administrators (PFAs) are to ensure that payments are made at the appropriate time to ensure adequate comfort for retirees.
The Head of Benefits and Insurance at PenCom, Mr. Lana Loyinmi, highlighted these roles while addressing participants at the 2014 Retirees’ Forum hosted by PenCom in Abuja recently.
In his presentation titled “Rights/Privileges of Retirees under the Contributory Pension Scheme,” Loyinmi said the commission provides PFAs computation models for calculating programmed withdrawal and approves benefit withdrawal modes and change of PFA.
He said the regulator issues investment guideline for active members and retirees' funds and general regulations and guidelines to PFAs and supervises PFAs and Pension Fund Custodians (PFCs) to ensure accurate and timely payments of pension to retirees.
PenCom also monitors PFAs for compliance, sanctions non compliance and constitutes Board of Inquiry (BOI) for case of missing persons and communicating the findingd of the board to the affected PFAs before approving the payment of death benefits.
According to Loyinmi, a retiree enjoys the right to continuous enlightenment on pension and financial matters by PFAs even as he is free to transfer his RSA before or after retirement from one PFA to another whenever the window is opened.
The retiree also has the right to negotiate or change the mode of withdrawal of pension benefits from programmed withdrawal to annuity and make available to his PFA, a quotation or provisional agreement from a life insurance company for the purchase of annuity, he said.
In line with the above rights, the retiree must understand that he cannot change from annuity back to programmed withdrawal at any time even as he is entitled to receive periodic statement of account from his PFA, by hard copy or e-mail.
The head of benefits at the commission also stated that for a retiree to be eligible for the above benefits, he is expected to provide his contact address after retirement and other documentations required by the PFA.
He is also to introduce his next of kin to his PFA before or after retirement, provide details of a bank account for receiving his retirement benefits, write or update a will naming an administrator.
Loyinmi also said PFAs are to enlighten retirees on the features of programmed withdrawal and life annuity, issue payment instructions to Pension Fund Custodians (PFCs) for periodic withdrawals and reissue standing order every 12 months.
The administrators are also expected to confirm the identity of the next of kin of the deceased, advice him on the valid Letter of Administration or Will admitted to probate and other requirements as well as notify PenCom of the death of a deceased or disappearance of a worker among other things.
Also, PFCs are to execute standing orders from PFAs for payment of periodic withdrawals to retirees, pay lump sum and periodic withdrawals and credit retirees’ bank accounts promptly, Loyinmi added.
Before now, the Acting Director General of PenCom, Mrs. Chinelo Anohu-Amazu, assured that new ways of improving retirement benefit administration processes to enhance the comfort of pensioners would be introduced.
She said the commission was collaborating with the insurance regulator, National Insurance Commission (NAICOM) to ensure that life annuity as proposed in the law is implemented fully.
Anohu-Amazu also underscored the need for adequate sensitisation and public enlightenment in order to create awareness on these regulations which also encapsulate the retirees’ rights and privileges.
The forum was convened to enable PenCom get feedback on the experiences of current beneficiaries of the contributory pension scheme to be incorporated into the future plans and programmes of the commission.
The programme also afforded retirees an opportunity to relate on common issues and correct any misinformation earlier passed to them by PFAs and insurance companies with regard to programmed withdrawals and life annuity.
It is also meant to identify grey areas, as perceived by retirees’ requiring the urgent attention of the pension regulator.