CPS: Where an employee dies or confirmed missing

The Nigeria Contributory Pension Scheme (CPS) introduced by the Pension Reform Act 2004 and revised in 2014 recognises the importance of the contributor, his contribution and what happens to him while in employment. This is both alive and in death.

With this realisation that there is life and there is also death, the CPS has taken care of the contributor, directly or indirectly, should either of the two happen as long as the person has made his contribution through his employer.

Section 8 (1) of the Pension Reform Act 2014 states that where an employee dies, his entitlements under the life insurance policy maintained under section 4(5) of this Act shall be paid by an underwriter to the named beneficiary in line with section 57 of the insurance Act.

Subsection 2 states that, upon receipt of a valid will admitted to probate or a Letter of Administration, confirming the beneficiaries under the estate of the deceased employee, the Pension Fund Administrator(PFA) shall, with the approval of the Commission, release the amount standing in the retirement savings account of the decease to the personal representative of the deceased or to any other person as may be directed by a court of competent jurisdiction, in accordance with the terms of the will or the personal law of the deceased employee, as the case may be.

In another case, where an employee is declared missing and if is not found within a period of one year from the date he was declared missing, a board of inquiry is set up by the National Pension Commission (PenCom), which concludes that it is reasonable to presume that he has died, and in this case, the provisions of this section shall apply.

While this law is there to enhance the welfare of the contributor, there are a number of challenges which beneficiaries would have to contend with if there was no prior effort to address them before death occurs. This is the issue of having not a will or dying interstate.

One of the challenges, which families of the deceased pension contributor faces after the death of their loved one is the process of claiming his pension entitlements, making it important that a pension contributor should procure a ‘Will’ for management of his or her estate should the unexpected happen.

A will is the most practical first step in estate planning, and makes clear how you want your property to be distributed after you die. It is simply a written declaration or statement by a person (the “Testator”) naming one or more persons, human or entity, as beneficiaries of his/her property after death.

Another person or persons are also named in the will as executors of the estate with property to be distributed after the testator’s death.

Writing a will can be as simple as typing out how you want your assets to be transferred to loved ones or charitable organisations after your death. If you don’t have a will when you die, your estate will be handled in probate, and your property could be distributed differently than what you would like.

It may help to get legal advice when writing a will, particularly when it comes to understanding all the rules of the estate disposition process.

A will must be written in sound judgement and mental capacity to be valid; The document must clearly state that it is your will. An executor of your will, who ensures your estate is distributed according to your wishes, must be named; It is not necessary to notarise or record your will but these can safeguard against any claims that your will is invalid and to be valid, you must sign a will in the presence of at least two witnesses.

What to do if there is no will

If someone dies without making a will, they are said to have died ‘intestate’. If this happens, the law sets out who should deal with the deceased’s affairs and who should inherit their estate including property, personal possessions and money, as well as his pensions.

Getting help from a solicitor

When someone dies without leaving a will, dealing with their estate can be complicated. It can also take a long time – months or even years in some very complex cases.

If matters are complex or you feel you need help, it’s a good idea to consult a solicitor as soon as possible. It’s advisable to show them all the information and documentation you have about the deceased person’s property, belongings and financial affairs. In the meantime, it may be a good idea to put small valuable items away for safekeeping. Usually a close relative like a spouse, child or parent will have the legal right to sort out the estate of the person who has died.

Letters of administration

In order to be able to administer someone’s estate you normally need to apply to the Probate Registry for a Letters of Administration. You can ask your solicitor to help you with applying for a grant or you can make a personal application.

On receipt of the grant you become the ‘administrator’ of the estate. The grant provides proof to banks, building societies and your pension fund administrator that you have authority to access and distribute funds that were held in the deceased’s name. The overall process is often referred to as ‘obtaining probate’, though technically this term applies where there was a will.