BY VICTOR AHIUMA-YOUNG

NIGERIA Employers’ Consultative Association, NECA, has offered explanation why some relatives find it difficult to access deceasedpensioners’ pensions under the Contributory Pension Scheme, CPS.

Director-General of NECA, Mr. Segun Osinowo, at an interactive session with Journalists, also spoke on the lump-sum controversy between retirees and Pension Fund Administrators, PFAs.

Dr. Musa Ibrahim, Commissioner for Enforcement, National Pension Commission, PenCom, Mr. Segun Osninowo, Drector-General of Nigeria Employers' Consultative Association, NECA, and Eyamba Henshaw, PenCom's Commissioner for Technical, at a pension interactive session in Lagos.

He said, “On the relatives of dead employees not able to access their benefits, there is a statutory issue there because if an employee is dead there is no basis for the PFAs to release his or her benefits to his relatives without letter of administration. This is so because if PFA releases the cheque to Mrs. A or B, and another Mrs. A resurfaces and then provides more cogent evidence that she is the authentic Mrs. B, then the law will hold the PFA liable.

So the pension reform is very clear in terms of the conditions which the relatives of the deceased should meet before they can access the terminal benefits of the deceased and other pension rights.

Having realised that, what we have done from our own end is to tell our members to educate their employees so that they can at least, put up a will stating that at the event of death, my benefits should be paid to Mrs. A or B. Where they have done that there will not be any problem in accessing terminal benefits or any pension rights. But any other way will run contrary to the law and expose the PFAs to a lot of litigations and liabilities.”

“The second issue is that the law is clear as to how the PFAs should manage the payment of pensions to retirees including payment of lump-sum. However, the issue here has to do with the 25 percent that will be paid to retirees from the total amount. But it is what you have in your account that the PFA restructures over the period of time.  We should not forget the fact that we are just seven years into this reform. So, what all of us have in our accounts is savings of seven years and if you are getting close to retirement and maybe you will retire in ten years time, then the money in your PFA account is 10 years savings. Even if you factor in 10 percent or 15 percent interest, it will be structured over the period of your possible lifespan which will really amount to nothing.”

“So we cannot just increase the salary arbitrarily which is one option, the other option is to increase the contribution both by the employers and the employees. But will the employee be prepared to take pay from what currently is not enough for future use? Will the employer be prepared to do that? Now lastly, for now, we are caught up with that and probably, it is the younger generation that will have the benefits of this pension scheme and not those who are already on their way out.”