The National Pension Commission (PenCom) has disbursed N274.34 billion in death benefits to the dependants of deceased pension contributors over the past five years under the Contributory Pension Scheme (CPS).
The payments, made between 2020 and September 2024, were distributed among 45,976 beneficiaries, according to newly released data from the regulatory body.
The Pension Reform Act of 2014 mandates that contributors who pass away while in service are entitled to benefits through a group life insurance policy maintained by their employer and the accumulated balance in their Retirement Savings Account (RSA), which is managed by a Pension Fund Administrator (PFA).
Speaking on the development, Agudah Oguche, Chief Executive Officer of the Pension Fund Operators Association of Nigeria (PenOp), noted that the rising trend in death benefit disbursements underscores both an increasing number of beneficiaries and a commitment to providing financial relief to families of deceased contributors.
Despite the structured payout process, industry experts say that accessing death benefits remains a challenge for many families, particularly in cases where the contributor dies intestate (without a valid will).
Legal disputes and bureaucratic hurdles often delay access to entitled funds, leading to prolonged financial strain for dependants.
Chika Onwunali, Managing Partner at Premium Debate, said it’s important to have estate planning and will to ensure a seamless transition of assets.
“A will is the most practical first step in estate planning. It provides clarity and ensures that beneficiaries receive entitlements without unnecessary legal disputes,” he said.
In instances where an employee is declared missing for over a year, a Board of Inquiry set up by PenCom may conclude that the individual is presumed dead, allowing the same provisions for death benefits to apply.
As Nigeria’s pension sector continues to evolve, ensuring a streamlined process for accessing death benefits remains a critical issue, particularly for families navigating the complexities of pension entitlements amid bereavement.
While the CPS provides a structured framework, greater awareness, legal preparedness, and regulatory efficiency are essential to minimizing delays and maximizing the scheme’s impact on beneficiaries.
