By Victor Ahiuma-Young
ONE of the objectives of the 2014 amendment of PRA is to ensure that every worker receives his retirement benefits as and when due as since the advent of the Contributory Pension Scheme, CPS, in 2005 following the Pension Reform Act, PRA, 2004, some stakeholders have been having one form of complaint or the other over assessment of the retirement benefits.
In a presentation on Benefits Processes and Payment Under the CPS, at Pension Desk Officers workshop organised by the National Pension Commission, PenCom, in Kaduna, the commission gave insight into how pensioners can access their benefits without stress.
While explaining that the two modes of withdrawal under CPS are Programmed Withdrawal and the purchase of Retiree Life Annuity, the commission informed that there are also benefits for the beneficiaries of a deceased contributor.
According to the commission, the first step to a seamless access of benefits is documentation where the prospective pensioner notifies his or her Pension Fund Administrator, PFA , six months ahead of retirement and supplies the PFA with the official Notice/of acceptance of Retirement from Employer, Last Pay Slip as evidence of Annual Total Emolument, ATE & GL/Step, Recent Passport Photograph, Any other Evidence of ATE, Quotation from an insurance company for the purpose of annuity product, if desired, Introduction of Next- of Kin to PFA before/ retirement, details of Bank Account and Contact address after retirement.
Another step is Standard notice of retirement. PenCom says this is a form where important information of the Retirement Saving Account, RSA, holder who wants to access his benefits are listed by his PFA. This form contains the name of the retiree, age, gender, date of birth, date of retirement, ATE, RSA balance, detail of benefits to be paid to retiree, employer’s detail, retiree’s contact etc.
Programmed withdrawal agreement: This is a document issued by the Commission for a retiree who wants to access his retirement benefits through Programmed withdrawal option to reflect his details. The amount to be reflected are RSA balance, Lumpsum and monthly pension. The form must be properly signed by the retiree.
Provisional annuity agreement: This, PenCom says, is a provisional agreement document issued by an insurance company to reflect the details of the retiree who wants to access his retirement benefits through annuity option. The agreed terms and amounts are to be stated in the document such as amount to be transferred to the insurance company as premium, annuity amount, lumpsum and guarantee term. It should be signed by the insurance company and the retiree.
Consolidation of the RSA: The commission explains that this the components of benefits at retirement and it entails Accrued Pension Rights, For past service before CPS/Pre-PRA benefits, Pension Contributions in RSA from July, 2004 to month of retirement, Return on Investment on balance in RSA and RSA Balance at Retirement.
In other word, it is Accrued Rights + Pension Contributions + Returns on investment
According to PenCom what constitutes death benefits are Accrued rights, Pension Contributions, Return on investment and Life Insurance Proceed.