The National Pension Commission (PenCom) said it will punish Pension Fund Administrators (PFAs) for wrong payments of death benefits to beneficiaries.
In the circular, the regulatory agency said any wrong payment of death entitlement would be borne by the defaulting Pension Fund Administrator.
The Commission also directed PFAs to fully ascertain all reported cases of dead Retirement Savings Account holders before making any payment to the beneficiaries.
PenCom stated this in a circular to all licensed Pension Fund Administrators on, ‘Addendum to the circular on revised procedures on the processing of death benefits.’
According to the circular, “In the event of payment to wrong beneficiaries, PFA shall be liable and pay from its statutory reserve fund.”
PenCom had earlier disclosed in a circular that some unidentified fraudsters under the disguise of being relatives of workers and retirees under the Contributory Pension Scheme had been approaching the PFAs to collect the pensions of contributors.
According to the commission, the fraudsters who had been deceiving the PFAs usually forge documents, and successfully collect the pension benefits of some living workers and retirees after providing ‘evidences’ that they were dead.
The commission revealed this in an earlier circular tagged ‘Revised procedures on processing of death benefits’, which was sent to the PFAs.
In the circular, PenCom says “The commission has received series of complaints from retirees, who alleged that their PFAs have wrongfully paid their benefits to their next of kin or legal beneficiaries, while they are still alive and in active service without their consent.
“Following these complaints and reports by the PFAs, it has become imperative to issue additional measures to curb these complaints and strengthen the processes and practices of processing and payment of death benefits, however, many of such cases had continued to drag without being resolved”
In the new circular, the apex pension regulatory body disclosed that PFAs were required to enhance the internal controls and carry out further investigation on the documentation submitted by the next of kin of the deceased before submission to the commission for approval.
PenCom added that all Pension Fund Administrators should ensure due process is followed and check at the probate registry of the issuing authority to confirm the genuineness of the documents, as well as the verification of the named administrator and sureties.