Operators attribute delay in paying pensioners to computation errors
The National Pension Fund Operators Association of Nigeria (PenOp), has attributed delay in paying lump sums to pensioners across the country suffers more delay to errors in beneficiary’s name and computation based on a standard template issued by the National Pension Commission (PenCom).
This was disclosed by the Chief Marketing Officer, Premium Pension Limited, Kabir Tijjani, at a 2017 retreat organised by (PenOp) for insurance journalists in Abeokuta, Ogun State.
He said Section 7 (1) (a) of the Pension Reform Act (PRA) 2014, allows for lump sum to be paid to a retiree provided the amount left after the lump sum withdrawal will be sufficient to fund a programmed withdrawal over expected life span. Tijjanni said technical hitches such as server downtime or bank network glitch could also lead to delay in payment of pension benefits.
He emphasised that contrary to the belief in some quarters, the Pension Fund Administrators (PFAs) are not unnecessarily delaying payment of benefits to retirees because they have no reason to do so, and they stand to gain nothing doing such.
He also adduced reasons for differences in benefits payment, saying the difference in Retirement Savings Account (RSA) could be caused by the size or accrued rights portion paid into RSA due to grade level and step as at June 2004. Also, the total monthly contribution based on individual grade level/structure from July 2004 to date of retirement, and the growth of the investment income based on the duration in which the contributions stayed in the RSA.
Tijjanni maintained that the amount of monthly pension or lump sum varies for individual retires due to age at retirement, gender, RSA balance, Size of Annual Total Emolument (ATE) and retiree’s choices.
With regards to age at retirement, he explained that using two retirees with different ages and other variables being equal, the older retiree will get slightly higher monthly pension than the younger retiree because his expected life span is shorter.
On gender, he said because the mortality table assumes that women live slightly longer than men, a male and female retiree with the same age and other variables being equal at retirement will definitely have differences in their pensions, as the template makes provision for the extra years that the female retiree is expected to live.
Giving more insight into the Retirement Saving Account (RSA) balance, the Executive Secretary, Ms Susan Oranye, said two retirees with different RSA Balance, with other variables remaining the same at retirement. This will result to higher monthly pension and (or) lump sum for the retiree with the lump sum for the retiree with higher RSA balance while the reverse is the case for the retiree with the lesser RSA balance.
The size of Annual Total Emolument with other variables remaining constant, she further said, will cause differences in monthly pensions and lump sum receivable