Mr Idowu Muslim, a Business Development and Research Manager Nigeria, NLPC Pension Administration Ltd., said the ‘Revised Programmed Withdrawal Template,’ introduced by the National Pension Commission (PenCom) would ensure prompt payment of retirees’ monthly benefits.
Muslim said this at an interactive session with the Staff of the News Agency of Nigeria (NAN) on Friday in Lagos.
According to him, the programme allows Pension Fund Administrations (PFAs) to input retirees’ details for easy calculation of benefits.
He said the introduction of the template on May 15 led to the reduction in the percentage of the lump sum paid to retirees as first tranche of benefits.
Muslim said the minimum lump sum, that is, total upfront payment, was reduced from 25 per cent to 20 per cent, after which the monthly pension would be calculated from 20 per cent to 80 per cent.
He said, “With the template, what we need to do is to put your age, sex, total amount contributed and salaries in the template.
“Once all the information is inserted into the template, it tells you what retirees can take as lump sum and what to be taken as monthly pension.
“Before the template, a retiree could get 25 per cent of total contribution as lump sum and the rest as programmed withdrawal or annuity depending on retiree’s choice,” said Muslim.
He explained that failure to update statement of account and inaccurate information on date of birth were some of the factors affecting prompt payment of pension to retirees.
Muslim said in choosing any option, retirees had to understand their peculiarities before deciding on which withdrawal method to choose.
He added that other factors needed to be considered were job loss, plan before retirement as well as retirees’ contributions before opting for annuity or programmed withdrawal.
“Annuity is guaranteed for 10 years, and thereafter for life, but provided the retiree is alive.
“If after 10 years, the retiree dies, nothing goes to the family because he or she is guaranteed for 10 years.
“So, after 10 years, what happens to the family if the retiree dies? I will advise that the retiree goes for annuity when he or she has a young family,” he added.
He urged workers to always remember that the idea behind pension was to make provision for life after service as well as support one’s family after death.
He said the Pension Reform Act of 2004 had made pension and life insurance compulsory, and that workers should know the difference between beneficiary and next of kin.
According to him, only a beneficiary is entitled to the retiree’s benefits in case of death while next of kin is a contact for information.
Muslim urged those still working to always check their statements of account regularly to ensure that they were informed on their monthly contribution instead of waiting to do so after retirement.