Category: Pension

By Omobola Tolu-Kusimo

Teachers are excited and looking forward to their retirement, The Nation has learnt.

This followed the extension of their Retirement Age, Length of Service, Special Salary Scale & Special Pension Scheme by President Muhammadu Buhari.

The proposal has been included in Executive Bill approved by the Federal Executive Council (FEC) for consideration and passage by National Assembly.

Buhari  during last year’s World Teacher’s Day okayed an extension of Retirement Age, Length of Service, Special Salary Scale & Special Pension Scheme for teachers.

The Pension Reform Act 2014, which provides for the Contributory Pension Scheme (CPS), pegs retirement age for teachers at 60.

A teacher, Mr Sola Adebayo, said he was due for retirement in two years but he was eager to work for another five years.

He said he had helped many students to become better in life and he would be happy to live well at retirement.

Another teacher, Mrs. Rebecca Atuche, who is also excited about the Presidents’ pronouncement, said they devote their entire life to building the foundation of younger ones.

She added that every teacher deserves a befitting retirement package from his or country.

The Head of Corporate Communications, National Pension Commission (PenCom), Mr. Peter Aghahowa, said the commission is bound to implement once it becomes law, noting that their role as a regulator is to implement the law.

He explained: “Pension deductions and contributions will continue up till teachers are 65. They will retire at 65. There is no adjustment to be made on our side. We will just comply with law.’’

“It means that when they are exiting by 65 is when they will start the process. They will go to their Pension Fund Administrator (PFA) at that time, make normal application and normal procedure will follow. No matter what, the CPS is the same. There has to be deductions from employers and employees. There is no special CPS”, he added.

By Omobola Tolu-Kusimo

The Lagos State Government has restated its commitment to the welfare of its pensioners.

At the 82nd Bond Presentation to 292 pensioners whose Retirement Savings Accounts (RSAs) were credited with N1.5billion, the Director-General, Lagos State Pension Commission (LASPEC), Mr. Babalola Obilana, assured retirees of the government’s commitment to their well-being.

He said previously bond certificates were released to Pension Fund Administrators (PFAs), but that to ensure efficient service to retirees, the agency embarked on issuing the certificates to pensioners.

He said: “LASPEC has gone beyond the excuses of retirees waiting endlessly before they can gain access to their funds, the world is moving forward and so are we. We are dedicated to our retirees because they have painstakingly contributed their quota towards making a Greater Lagos.”

Obilana urged the retirees to ensure that they do proper documentation to avoid delays in payments due to wrong or missing documents. The retirees were also enjoined to be wary of fraudsters.

Earlier, the Principal Legal Officer, LASPEC, Ms. Abimbola Akintayo, gave an overview of options available to retirees, stating that the two options available were Programmed Withdrawal and Annuity.

She advised the retirees to choose an option based on their circumstances and not follow the crowd.

By Omobola Tolu-Kusimo

An international rating agency, A.M. Best Rating Services has awarded a bb+ Stable outlook to Custodian and Allied Insurance Limited in the year after an independent analysis of its operations.

According to the agency, the stable outlook reflects AM Best’s view that the balance sheet strength is expected to remain underpinned by the strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR).

It said: “Over time, increasing capital requirements stemming from strong business growth are likely to be adequately supported by retained earnings, bolstered by the company’s robust underwriting profitability.

“With excellent liquidity as a result of cash and equivalents comfortably covering net insurance liabilities, the rating agency pointed out that Custodian has moderate exposure to local equities and real estate, which account for approximately one-fifth of invested assets, even as it has high reliance on reinsurance, primarily for the oil and energy line of business.”

On the operating performance of the insurer, it stressed: “It’s good and improving overall earnings that significantly exceed inflation are underpinned by robust underwriting profitability and investment income, as operating performance is expected to remain strong over the medium term.’’

On the Enterprise Risk Management of the company, the report further states: “Internal risk management expertise has improved in recent years. There is an ongoing process of risk identification and monitoring through the use of specific risk management tools. An internal economic capital model has been developed and incorporated into the company’s strategic decision-making process. High economic, political and regulatory risk exposures are expected to remain a significant challenge for the company’s risk management.”

By Omobola Tolu-Kusimo

Sovereign Trust Insurance (STI) Plc has paid N13.3 billion to its clients  that suffered various losses in the last five years, its Managing Director/Chief Executive Officer (CEO), Olaotan Soyinka, has said.

Soyinka stated that the claims, which were paid between 2016 and last year, underscored the company’s strong financials and commitment to its customers.

Giving a breakdown of the claims, he said energy insurance ranked number one with N4.2 billion while Fire insurance rank number two with N3.1 billion.

Motor insurance, he said, ranks third with N3.036 billion as General Accident comes fourth with N1.3 billion, Marine fifth on the table with N1.2 billion while Construction All Risk Insurance (CAR & Engineering) sixth with N235 million.

He said it is the company’s policy to pay  genuine claims promptly, stating that claims payment is paramount to the firm.

Executive Director, Technical Operations, Jude Modilim, said: “The company is committed to settling genuine claims and there is no compromise to that as long as long as the t’s have been crossed and the i’s dotted.

“Genuine claims settlement in STI is a major focus of our operations and we do not pay lip service to it. Claims settlement is the only way to prove that we are well and alive to our responsibilities as an underwriting firm in the country.’’

By Omobola Tolu-Kusimo

What is the guarantee that the pension funds under the Contributory Pension Scheme (CPS) will be well managed and not diverted?

The functions of the Pension Fund Administrator (PFA) and Custodian are spelt out in the Pension Reform Act 2004. The Act provides adequate safeguards against the misuse of the pension funds and assets by any operator.

What happens if a PFA fails or is liquidated?

The pension funds and assets in the Retirement Savings Account (RSA) are kept by the PFC and as such the liquidation of the PFA will not affect the funds and assets. Besides, every PFA is expected under the Pension Reform Act 2004 to maintain a statutory reserve fund as contingency fund to meet claims for […]

Who can I complain to if I have a problem with a PFA?

The Pension Reform Act 2004 allows any employee to complain about any PFA to the National Pension Commission (PENCOM).

What is the role of the government in the new pension scheme?

The Federal Government has established PENCOM and charged it with regulating and supervising new pension scheme.

Can the government take or use the money in my RSA for any purpose?

The government cannot tamper with the pension funds in your RSA, because the Government cannot have access to the account. Besides, the Government is primarily concerned with ensuring the safety of the money in your RSA through the enforcement of strict rules and regulations.

By Omobola Tolu-Kusimo

Stanbic IBTC Pension Managers has appointed Olumide Oyetan as its new Managing Director. It took effect from February 1, 2021.

He replaced Eric Fajemisin who has left the company.

According to the PFA’s website, Oyetan joined Stanbic IBTC in 2000 and has served in various roles across the Group within and outside Nigeria.

Prior to his appointment,  Oyetan was Executive Director (ED), Investments. He was also Head Projects for Wealth, Africa Regions in 2017, as well as Head of Advisory Products for the Standard Bank Wealth and Investment business in South Africa.

He served as the Chief Executive of Stanbic IBTC Asset Management between July 2009 and July 2015. He was ED, Investment Management for Stanbic IBTC Asset Management and acted as Head, Investment Management at Stanbic IBTC Pension Managers Limited where he oversaw various investment strategies and portfolios.

Olumide holds a Bachelor’s degree in Economics, Politics and Government from the University of Canterbury, United Kingdom as well as a Master of Science in Financial and Commercial Regulation from the London School of Economics and Political Science.

By Omobola Tolu-Kusimo

The National Pension Commission (PenCom) has threatened to sanction any Pension Fund Administrator (PFA), which deny retirees of the right to change their models, The Nation has learnt.

In line with the provisions of Section 7(1) of the Pension Reform Act (PRA) 2014, retirees are given two retirement benefit modes – Programmed Withdrawal (PW) and Retiree Life Annuity (RLA), which they are required to choose from payments.

While PW is an income paid by a PFA to a retiree monthly or quarterly. RLA is a stream of income purchased from a life insurance company with the RSA balance under the CPS as premium.

Under PW, the cash in the Retirement Savings Account (RSA) is re-invested by the PFA to generate more income. Upon his death, his beneficiary is paid the balance.

Life Annuity, on the other hand, provides a guaranteed periodic pension to a retiree in his or her life after retirement. Annuity is guaranteed for 10 years. If the retiree dies within the first 10 years of retirement, the monthly annuity will be paid to his beneficiary for the balance up to 10 years.

Notably, RLA regulations are issued by the PenCom and the National Insurance Commission (NAICOM).

However, some PFAs are reluctant and create bottlenecks to reject requests from retirees to transfer their fund to an insurance firm for life annuity.

For years, there was also the issue of demarketing between PFAs and annuitants, leading to bickering among their regulators. They were, however, able to restore peace in both industries after agreeing to a mode of regulation.

PenCom, in a circular entitled: “Procedure for Reprogramming RSA Balances of Retiree Already on Programmed Withdrawal Exercising Their Rights to Transfer to Retiree Life Annuity”, warned PFAs against blocking retirees from transfering.

The circular read: “PFAs should issue the  RSA balance to a PW retiree seeking to transfer to RLA to obtain quotation from a life insurance company of his/her choice. PFAs should re-programme retiree’s RSA using the present RSA balance, current age, gender. Please note that the Annual Total Emolument (ATE) provided as at retirement should still be adopted. No provision shall be made for lumpsum and pension arrears; and provision shall be made for one-month pension buffer to avoid gap in pension payout.’’

It added: “The proposed annuity value should at best be within the range of the minimum and maximum pension as determine on the PW template, higher than the maximum pension; PFAs should note that appropriate sanction would be imposed for violator of the provisions of this circular; and PFAs are required to submit monthly returns to the Commission or alt R LA rejection, on or before the 10′ working day of the preceding month using the attached specimen format.’’

By Omobola Tolu-Kusimo

Retirees under the Contributory Pension Scheme (CPS) have appealed to the Federal Government to release more funds that can pay the backlogs of their accrued rights.

TheContributory Pensioners Union of Nigeria made the appeal in a communique signed and made available to reporters by the President, Comrade Mathew Shittu, and Secretary, Elijah Akingbade

Shittu, who lauded the National Pension Commission (PenCom), urged the commission to engage the Federal Government to pay the arrears.

He frowned at the Federal and state government’s intension to borrow from the CPS fund at the expense of their members who were yet to get their retirement benefits.

He said it was unfortunate that states that have not joined the pension scheme want to reap where they have not sown.

Meanwhile, the Federal Government last week released N11.818 billion for paying accrued rights.

The Director-General, PenCom, Mrs. Aisha Dahir-Umar said the accrued rights represent benefits for employees of Treasury Funded Ministries, Departments & Agencies (MDAs) who worked up to June 2004, when the Pension Reform Act was introduced.

She said the commission appreciated the efforts of the Federal Government in ensuring that the accrued rights arrears were cleared.

By Omobola Tolu-Kusimo

The National Pension Commission (PenCom)  has warned Pension Fund Administrators (PFAs) that violates the procedures on death benefit payments.

The commission has threatened to punish the PFAs that paid death benefit payments without following due process.

Subsequently, the commission has stopped the operators from paying more inflows into deceased employees’ Retirment Savings Account (RSA), advising them to get approval after initial approvals had been given.

The circular with reference number PENCOM/INSP/CIR/SURV/20/1383 to licensed pension fund operators entitled: “Cessation of payment of death benefit claims to legal beneficiaries without Commission’s approval”dated December 1, 2020, reads: “Please recall the Commission’s directive to PFAs via its letter dated 16 May 2013 to pay additional inflows into deceased employees’ RSA to legal beneficiaries, after initial approval has been obtained, without reverting to the Commission for further approvals.

“However, the Commission has noted in recent times increase in death benefit payments that did not meet the required internal control measures Hence, the need to strengthen the death benefit payment process.

“Accordingly, the Commission hereby directs the immediate cessation of payment of additional death benefit claims without the Commission’s approval. Consequently, the following procedure should be followed by PFAs in the processing, approval and payment of death benefit claims.”

The commission stated that requests for payment of initial death benefit claims to legal beneficiaries should be submitted to the commission for approval via the Risk Management Analysis System (RMAS).

“Requests for payment of additional death benefit claims to legal beneficiary(ies) must be submitted through the Benefits and Insurance Department’s dedicated email. The Commission will review requests for payment of death benefit claims and approve or decline the requests; and on no account should additional death benefit claims be paid to legal beneficiary(ies) without the Commission’s approval.

“Appropriate sanctions would be imposed on PFAs for violation of the above procedure for death benefit payments. This circular supersedes the commission’s letter of 16 May, 2013 on the payment of death benefit claims and is effective from December 1, 2020,” the added.