How to avoid losing your pension savings

Akpan worked in amid-sized engineering firm in Lagos and his employer had enrolled him into the Contributory Pension Scheme (CPS)with one of the Pension Fund Administrators (PFAs), with a lot of money already accumulated in his Retirement Savings Account (RSA).

After five years of working in the engineering company, Akpan got a new job with a private oil service firm in Calabar, River State where he relocated with his family, including his wife and two children.

In the process of relocating, Akpan lost his phone and got a new mobile line that he used while working with his new employer in Calabar.

Few years later, Akpan and his wife divorced and the woman went away with their two kids. To ensure his former husband did not reach heragain dropped her old phone number and went for a new one which Akpan didn’tknow.

Following a boat mishap (accident) that happened during one of his official trips offshore, Akpan died and was buried in his home town in the suburb area of Calabar.

Two years gone, no one heard from Akpan, and his pension contributions no longer coming. Three years gone, the story remained the same.

The PFAhaving been sending communications and updates on Akpan’s fund to his email, house address out of curiosity tried reaching out to Akpan on telephone number found in his file with the PFA, but without success.

Again out of curiosity, the PFA sent customer service unit to his house address that was in his file with the PFA, and only to discover that Akpan and his family had left their Lagos home over four years ago.

On checking the file to get the contactof his next of kin, who happens to be his divorced wife to find out about Akpan and his new contact details, the line also did not go through.

Now, the PFA does not know how to reach Akpan, his family or his where about. No one has come for his death benefits, or pension contributions.

But why should he change his address, phone number and employment without notifying the PFA where his life savings for retirement is domiciled?

That is the story of Akpan. He changed his residential address without notifying his PFA. He changed his phone number without also notifying his PFA. He probably changed his next of kin, without notifying his PFA.

Now, his pension contribution is in his RSA account, without any way to reach him or his family members. This is the mistake many pension employees and contributors are making, and the irony of it all is that even the PFAs cannot take this money as their own.

The PFAs are never happy when this kind of thing happens because the objective of the CPS on such individual was not met and the way the CPS is structured, nobody can corner such money. It belongs to the owner of the RSA PIN.

Are you an employee, contributing alongside your employer into your RSA PIN, ensure that you update your records with your PFA from time to time, including details of your next of Kin, if you make changes. This is important for the effective management of your pensions, Ronke Adedeji, chairman, Pension Fund Operators Association of Nigeria(PenOp) said.

Adedeji said one of the challenges PFAs have with management of contributor’sfunds is tracking difficulties.

“We have a situation of changes in customer data not communicated to PFAs leading to difficulties in locating some clients”

She noted that another challenge is low adoption of self-help platforms.According to her, despite huge investments in technology by industry players, a high percentage of clients remain comfortable with the old, manual way of doing things.

From our PFAs websites, which are general online real-time, you can actually communicate changes in your profile and status for the knowledge of your PFA and subsequent update of your file.

She said that many customers do not pay attention until retirement, which is why certain changes in their profile and statues are not communicated to their PFA leading to tracking difficulties.

According to her, employees and contributors must be active participant for effective running of the scheme.

The objectives of CPS is to ensure that every person who worked in either the public Service of the Federation, Federal Capital Territory, States and Local government or the Private Sector receives his retirement benefits as and when due ; and to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.

The provisions of this Act shall apply to any employment in the public service of the Federation, the public Service of the Federal Capital Territory, the Public Service of the state, the public service of the local governments and the private sector.

In the case of the Private Sector, the Scheme shall apply to employees who are in the employment of an organization in which there are 3 or more employees.

Notwithstanding the provision of subsection (2) of this section, employee of organization with less than three employees as well as self-employed persons shall be entitled to participate under the scheme in accordance with guidelines issued by the National Pension Commission.