We have different types of benefit payments, which include:
Mandatory/compulsory retirement Benefit: This is processed when a client attains the age of retirement or has completed the length of service as specified by the conditions of service of the employer.
Death benefit: This is paid to the Next-of-Kin of a deceased client.
Temporary loss of job: This is available to be accessed by a client, whose appointment is terminated by his employer and remains out of job for up to 4 months. The client could access a maximum of 25% of the total RSA balance.
Retirement based on ill health: This is basically for those who are not medically fit to continue with their employment.
Mandatory and compulsory retirement
Mandatory retirement occurs when an employee disengages at the retirement age or completion of length of service, based on the terms of employment after attaining the age of 50years. Compulsory retirement on the other hand, is a disengagement from service in accordance with the terms and conditions of employment, before attaining the age of 50 years (Please refer to Section 1.2 of the Regulations for the Administration of Retirement and Terminal Benefits)
Grounds on which Retirement will be allowed before the Age of 50years
The minimum age allowed by Section 16(1) of the Pension Reform Act (PRA) 2014 for accessing retirement benefit is pegged at 50years. However, Section 16 (2) of PRA 2014 outlined some exceptions to this rule: An employee who is physically or mentally incapacitated or permanently disabled, may opt for retirement, even when he or she is below the age of 50 years, after providing the required documentations as provided in the Regulation. Any employee may retire before attaining the age of 50 years, provided this is in accordance with the terms and conditions of his/her employment and will have a full access to withdraw from his/her RSA Account- a maximum of 25%. He/she will be entitled to enjoy programmed withdrawal after attaining the age of50years. (Please refer to Sections 2.2, 2.3, 5.2.1, 5.2.2 and 5.2.3 of the Regulations for the Administration of Retirement and Terminal Benefits)
Returning to CPS after Retiring on Health Grounds
A retiree who had earlier retired on health grounds may return to the Scheme on presentation of a medical certification of fitness from a medical board or a physician, upon securing another employment. The re-entry stops the withdrawal option automatically to enable resumption of contribution. (Please refer to Section 16 (3) of PRA 2014and Section 2.2.7 of the Regulations for the Administration of Retirement and Terminal Benefits).
Payment of Death Benefit to Next-of-Kin
Death benefit could be either for an active RSA contributor, who dies in service or for a client who has already retired from an active service. In the case of an active RSA holder that dies in service, Section 8 (1) of PRA 2014 provides that the life insurance policy maintained on behalf of such a client should form part of the payments to be made to the Next-of-Kin.
The deceased client at the point of registration chooses a Next-of-Kin and the onus of ensuring that the right person is paid, remains that of the PFA.
The importance of ensuring that the right Next-of-Kin is paid cannot be overemphasized, as any negligent act in this regard may render the PFA liable.
A Next-of-Kin is expected to provide a satisfactory means of identification such as a valid International passport, National Identity Card or Letter of Confirmation of Identity from his/her bank, or Notary Public.
A Next-of-Kin’s information has to be reconciled with the information available on a database to ensure there are no discrepancies. (Please refer to Section 3.1.2 of the Regulations for the Administration of Retirement and Terminal Benefits)
The Meaning of Letter of Administration, the process of obtaining it and the responsibility of confirming its validity.
A Letter of Administration is the legal authority granted by the Probate Court, to a person called the administrator of the estate or property of a person who died inte estate. A person is said to have died intestate, when he dies without leaving behind a valid will. The administrator derives his or her authority to act from the terms of the letter of administration. The process of obtaining the Letter of Administration varies from State to State in Nigeria.
The following are common to all states: An application has to be submitted to the Probate Registry.
The Probate Registry will make a publication in the National Newspaper, bringing the request to the notice of the general public and asking for objections, if any, the Probate Registry will wait for a reasonable period and if no objection is received, the Letter of Administration will be issued.
Some states in Nigeria will require the applicant to appear before a court, for a Judge to grant the application.
The responsibility of confirming the validity of Letters of Administration rests on the PFA. There is the need to visit the Probate Registry where the Letter of Administration was issued to confirm the originality. Alternatively, a Certified True Copy of the Letter of Administration could be requested from the court that issued the document. (Please refer to Section 3.1.6 of the Regulations for the Administration of Retirement and Terminal Benefits).
Please note that for each benefit type, there is a list of documents to be submitted by clients, for their benefits to be processed for payment. These lists could be accessed from your PFA. Source: Premium Pensions Limited.
