- PenCom Stops Death Benefits Account For Employees
The National Pension Commission (PenCom) has announced that Death Benefits Account (DBA) will be stopped for deceased employees under the Contributory Pension Scheme (CPS) with effect from the 1st of February 2020.
In a public noticed issued, PenCom directed all the Pension Fund Administrators (PFAs) to stop the opening of DBAs from the 31st of January 2020.
According to the Commission, Section 11(1) of the PRA 2014 mandates every eligible employee to maintain a Retirement Savings Account (RSA) with the Pension Fund Administrator of his/her choice.
PenCom further noted that the Act also mandates every employer to open a nominal RSA within six months of assumption of duty for the employee who fails to open an RSA in accordance with section 11(5) of the PRA 2014.
“Employers are therefore required to ensure that RSAs are opened for all their employees,” the Commission noted.
PenCom explained that “prior to the Pension Reform Act (PRA) 2014, Death Benefits Account (DBA) was used by legal beneficiaries to access the benefits of the deceased employees who did not open RSA during their lifetime. However, pursuant to the above-cited statutory provisions, this practice is no longer valid.”
Part of the notice reads: “Accordingly, the general public is hereby notified that the processing of DBA for death benefits claims would be discontinued with effect from 1 February 2020.
“All PFAs have been directed to stop the opening of the DBAs with effect from 31 January 2020.”
“The National Pension Commission reiterates the need for all employees to ensure that they open RSAs with any PFA of their choice. A list of licensed PFAs can be found on the Commission’s website,” PenCom stated.
The Pension Reform Act 2004 established the PenCom as the body to regulate, supervise and ensure the effective administration of pension matters in Nigeria.
The PenCom is vested with the responsibility to ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory or Private Sector receives his retirement benefits as and when due.
In order to reduce old-age poverty, PenCom also assists individuals by ensuring that they save to cater for their livelihood during old age and make sure pensioners are not subjected to untold suffering due to inefficient and cumbersome process of pension payment.
