President Muhammadu Buhari, GCFR

PenCom to sanction pension administrators denying retirees annuity

Emmanuel Akosile | ConsumerConnect

Nigeria’s National Pension Commission (PenCom) has said that any Pension Fund Administrators (PFAs) that collect pensions through them under the Programmed Withdrawal but refuse to approve annuity for retirees will be penalised henceforth.

Annuity refers to monthly pension payments under the Contributory Pension Scheme by life insurance companies, while Programmed Withdrawal (PW) is the monthly pensions paid by PFAs.

ConsumerConnect reports the Commission stated this in a circular titled, “Procedure for Programming RSA Balances of Retirees already on Programmed Withdrawal Exercising their Rights to Transfer to Retiree Life Annuity’ Thursday, September 3.

In the circular endorsed by Ehimeme Ohioma, PenCom’s Head of Surveillance, the regulator said: “PFAs should note that appropriate sanction would be imposed for violation of the provisions of this circular.

“PFAs are required to submit monthly returns to the commission on all RLA rejection, on or before the 10th working day of the preceding month using the attached specimen format.”

It disclosed that its attention had been drawn to the unfair practice whereby PFAs reject the provisional Retiree Life Annuity (RLA) agreement presented by retirees already on programmed withdrawal desiring to transfer to retiree life annuity as the preferred mode of retirement.

PenCom has instructed the PFA’s to re-programme the present RSA balances of retirees on PW who seek to transfer to RLA using the stated procedures.

The Commission stated: “PFAs should issue the current RSA balance to a PW retiree seeking to transfer to RLA to obtain quotation from a life insurance company of his choice.

“PFAs should re-programme retiree’s RSA using the present RSA balance, current age, gender.”

The annual total emolument provided as of the point of retirement should still be used and no provision should be made for lump sum and pension arrears, said the Commission.

“The proposed annuity value should at least be within the range of the minimum and maximum pension as determined on the PW template or higher than the maximum pension,” it declared.

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