The National Pension Commission (PenCom) has addressed concerns regarding delays in the disbursement of death benefits to beneficiaries of deceased pension contributors. These delays, often frustrating for grieving families, stem from the stringent verification procedures implemented by Pension Fund Administrators (PFAs). This meticulous approach is crucial to prevent fraudulent claims and ensure that benefits reach the rightful recipients. While acknowledging the emotional distress caused by these delays, PenCom emphasizes that due diligence is paramount in safeguarding the integrity of the pension system. The commission is committed to streamlining the process while upholding its responsibility to protect the funds of contributors and their beneficiaries.
The process of verifying beneficiaries involves multiple layers of scrutiny. PFAs must confirm the identity of the deceased contributor, validate the legitimacy of the claimed relationship with the beneficiary, and often conduct field visits to corroborate information provided. This rigorous process, although time-consuming, is essential in preventing fraudulent activities, such as individuals falsely claiming death benefits for living contributors or multiple claimants vying for the same entitlement. The potential for fraud is a significant concern for PenCom, as illustrated by a case where a supposedly deceased contributor was found alive during a routine verification visit by the PFA. Such incidents underscore the importance of meticulous verification procedures, however inconvenient they may seem.
PenCom has implemented robust measures to ensure accountability in the disbursement of death benefits. PFAs are required to sign indemnity agreements with the commission, holding them financially responsible for any wrongful payments. This provision acts as a strong deterrent against negligence and incentivizes PFAs to conduct thorough investigations before releasing funds. The commission also emphasizes the importance of contributors providing clear and accurate information regarding their next of kin. Vague or conflicting records can significantly complicate the verification process and lead to further delays. Contributors are urged to designate readily accessible and dependable individuals as their next of kin to facilitate a smoother claims process.
While emphasizing the necessity of stringent verification, PenCom remains committed to improving the efficiency of benefit disbursements. Starting in June 2025, PFAs will be granted greater autonomy in approving most retirement benefit applications, reducing the administrative burden on the commission and potentially accelerating the process for beneficiaries. However, death benefits and other sensitive cases will continue to require regulatory oversight due to their inherent complexity and vulnerability to fraud. This balanced approach aims to expedite legitimate claims while maintaining essential safeguards against malfeasance.
The recent Crusader Sterling Pensions Limited Stakeholders Forum in Lagos provided a platform to discuss these crucial issues. Ladi Ishola, Principal Manager at PenCom’s South-West Zonal Office, highlighted the challenges faced by PFAs in navigating the complex landscape of death benefit claims. He stressed the need for both contributors and beneficiaries to understand the importance of accurate record-keeping and cooperation with PFAs throughout the verification process. He reiterated PenCom’s commitment to balancing efficiency with security, ensuring that benefits reach the rightful beneficiaries while protecting the integrity of the pension system. The forum also served as a testament to the growth and dynamism of the Nigerian pension industry.
Crusader Sterling Pensions (CPL) announced a significant milestone at the forum, becoming the first PFA in Nigeria to surpass the N10 unit price mark on its Retirement Savings Account Fund II (RSA Fund II), the default investment fund for active contributors below 50 years old. This achievement underscores CPL’s strong investment performance and reinforces its position as a leader in the industry. The company also reported a substantial 28% growth in its total assets under management, exceeding the industry average and reflecting the overall positive trajectory of the Nigerian pension sector, which experienced a 22.65% year-on-year growth to reach N22.51tn by December 2024. The forum, themed ‘Future-Ready Pensions: Innovating for a Secure Tomorrow,’ highlighted the industry’s focus on long-term growth and sustainability, ensuring a secure financial future for Nigerian retirees.
