PenCom new Circular on Cessation of Payment of Death Benefits

The National Pension Commission (PenCom) has released a new Circular on the cessation of payment of Death Benefits claims to legal beneficiaries without PenCom’s approval.

PenCom referred to its directive to Pension Fund Administrators (PFAs) via its letter dated 16 May 2013 in which it allowed PFAs to pay additional inflows into a deceased employees’ Retirement Savings Account (RSA) to the beneficiary (ies) without reverting to PenCom for further approval.

PenCom however noted that in recent times there has been increase in death benefits payments that did not meet the required internal control measures, hence, the need to strengthen the death benefit payment process.

Accordingly, PenCom has directed the immediate cessation of payment of additional death benefits claims without PenCom’s approval.

Consequently, the following procedures are to be followed by PFAs in the processing, approval and payment of death benefits claims going forward.

1. Requests for payments of initial death benefits claims to legal beneficiary (ies) should be submitted to PenCom for approval via the Risk Management Analysis System (RMAS), a system already available to all PFAs.
2. Requests for payments of additional death benefits claims to legal beneficiary (ies) must be submitted through the Benefits and Insurance Department dedicated email address already available to PFAs.
3. PenCom will review requests for payment of death benefits claims and approve or decline the requests accordingly.
4. On no account should additional death benefits claims be paid to legal beneficiary (ies) without PenCom’s approval.
5. Appropriate sanction would be imposed on PFAs for violation of the above procedure for death benefits payments.
6. The new Circular supersedes PenCom’s letter of 16 May 2013 on the payment of death benefit claims.
7. This new Circular is effective from 01 December 2020.

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