Pensioners
By Amah
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Payment of lump sum under the Contributory Pension Scheme, CPS, at retirement is very important to a potential pensioner.
Not many prospective retirees know that there are procedures to ensure seamless payment of this very money to begin the new phase of the life.
But an expert in the industry, Ibrahim Duroorike, has given insight into this and many more.
Mr Duroorike who is an Annuity and Investment Executive, Custodian Alliance Insurance PLC, spoke in Ibadan, Oyo State, during the recent 6th Quadrennial (but 13th) National Delegates’ Conference of the National Union of Shop and Distributive Employees, NUSDE.
Among others, he said processing lump sum for programmed withdrawal or annuity, requirements include ”Duly signed letter requesting for Lump sum payment with current mailing address and telephone number(s), Retirement letter, Last pay slip before month of retirement, PenCom Verification slip (Federal Sector Retirees), Clearance Letter & Bond Certificate (Lagos State Retirees), Employers confirmation of Accrued Right (Private Sector Retirees), Birth Certificate, Two Recent Passport Photographs, Means of Identification which could be; National Identity Card, Driver’s License or International Passport, Indemnity form. (Obtained from the Pension Fund Administrator, PFA), Programmed withdrawal agreement for programmed withdrawal (Obtained from PFA), Annuity agreement (Obtained from Insurance Company) and Bank confirmation of Account details with affixed passport photograph duly stamped and signed by bank.”
According to him, variables that determine lump sum and programmed withdrawal are Retirement Saving Account, RSA, Balance, Final Salary(Basic + Housing+ Transport) x 12, Age at Retirement and Sex of Retiree.
All of these variables are imputed into the Template provided by National Pension Commission and Minimum Lump sum, Maximum Lump sum with corresponding monthly/quarterly payment is drawn.
Please note that the percent a retiree can withdraw as lump sum is not automatic, but dependant on RSA balance and variables supplied.
What can delay payment
He explained in the first week of application for lump sum payment, review of submitted documents and application, and reconciliation of statement of account are done.In the second week, Processing and submission of approval request to the National Pension Commission, PenCom, is done, while in the third week is the receipt of PenCom’s approval for payment and crediting of retirees account.”Mr Duroorike noted that “the following have been identified as the major challenges faced while processing retirement/death benefits: Late submission of Accrued rights letter of retiree. Late submission of Employer’s Confirmation letter for deceased.” Non remittance of life insurance for deceased (Death benefit ). Late processing and submission of Letter of Administration by deceased’s next of kin, NOK. Late submission of last pay slip by retirees. Incomplete documentation. Late submission of Estate account for beneficiary (Death benefit). Falsification of vital information like age, pay slip, etc. Late signing of programmed withdrawal template. Vanguard
