PenCom Issues Public Notices On Administration Of Life Insurance Policy

Pension asset

The National Pension Commission (PenCom), on Wednesday, 14 February 2018, issued two-pronged notices to both employers and employees on the administration of life insurance policy. The public notices are meant to serve as a reminder to the earlier issued guidelines for life insurance policy by PenCom.

The first notice (Notice 1), issued pursuant to the provisions of Section 4(5) of the Pension Reform Act, 2014, is addressed to all employers of labour and seeks to ensure compliance with PenCom’s guidelines for life insurance policy.

Highlights of this notice include;

  1. Submission of the life insurance certificates (the Certificates): Employers are mandated to submit copies of the Certificate, with the schedule of beneficiaries to PenCom no later than 31 March 2018
  2. Content of the Certificates: The Certificates should state that the employees are covered up to an amount not less than 3 times of their annual total emoluments

The second notice (Notice 2) seeks to use employees to check employers’ compliance by intimating all employees of their rights to life insurance policy and pension contributions.

It specifically urged employees to:

  1. insist on their employers taking out life insurance policy on their behalf, for an insured amount of not less than three (3) times their annual total emoluments
  2. ensure that all pension contributions deducted from salaries or contributed to by employers are remitted to the respective Pension Fund Custodian by the employer not later than seven (7) days from the day salary was paid
  3. report any irregularities to PenCom in respect of any failure on the part of the employer to procure the minimum required life insurance policy, submit evidence of compliance and remit deducted pension contributions.
Read Also:  Access Bank And Diamond Bank To Hold Female Entrepreneurs Conference

While these notices are a good development in ensuring the welfare of labour in Nigeria, it would be interesting to see how things will play out with respect to implementation. A scenario that is expected to play out is one in which an employee, in current employment, reports his/her employer to PenCom. Is there a safety net for such employee?

It is therefore expedient for PenCom to come up with monitoring strategies to appropriately see to the compliance of employers to their obligations with respect to life insurance policy.

The post PenCom issues public notices on the administration of Life Insurance Policy appeared first on Deloitte Nigeria Blog.