By Ifeanyi Ugwuadu
The mandatory group lifeÂ insurance provided in the Pensions Act 2004 will now be expanded to cover disability during the life of the insured. This was part of the amendment being sought by operators into the existing law.
Section 9, sub-section (3) of the Act provides; â€œIn addition to the rates specified in sub-section(1) of this section, employers shall maintain life insurance policy in favour of the employee for a minimum of three times the annual total emolument of the employee.â€
But both legal and insurance experts have picked holes in this provision pointing out that there is no where disability cover is not part of life insurance and therefore suggested amendment to the Act to provide for disability.
This position was adopted by participants at the end of the 2-day National Conference on the Review of the Implementation of the Pension Reforms.
Dr Timi Austen-Peters who read the position paper on behalf of a group of participants that reviewed the paper, Pension Act 2004: An Assessment of the Adequacy of the Legal Framework delivered by Dr Kanu Agabi, former Attorney-General of the Federation said it was important that the disability cover is key to the insurance package.
Austen-Peters who also played a key role in drafting the Pensions Act also stated that his group also discovered that actuaries mentioned Section 39 sub-section(2) of the Act are not covered by any regulation.Â The actuaries are required to carry out valuation of the pension fund assets every financial year for employers operating the defined benefits scheme.
The discussion group thus, recommended that actuaries should be brought under one regulatory authority so that their activities can be supervised. Most actuaries in Nigeria have insurance backgrounds and have played actively in the sub-sector. â€œActuaries are not regulated for nowâ€, the group noted, advising that â€œPencom should draw up a list of actuaries qualified to sign off valuationsâ€ alleging that all manner of persons may just claim to be actuaries if no criteria exists.
In the case of dispute between a contributor and pension fund administrator or pension fund custodian, the group proposed an amendment that will remove arbitration as an option provided in Section 93 of the Act and replace it with a tribunal specially established for pensions adjudication.
They also insisted that there should be a harmonised role between the Pension Commission and Federal High Court in the resolution of disputes arising from the operations of players in the Contributory Pension Scheme.
They also want a guaranteed access to a proportion pensions funds of individual contributors who have saved up to 10 years. The group enjoined the federal government to provide such guarantee.