Policy clog, implementation bar retirees from accessing annuities

Policy interpretation and implementation hiccups have continued to deprive retiree’s the opportunity to take annuities as part of retirement payout options, as provided in the Pension Reform Act 2014.

Retirees who could have taken annuity have been compelled to stay with programmed withdrawal option, while the policy hiccups between the National Insurance Commission and the National Pension Commission lingers.

Both regulators were said to be meeting and consulting to fine-tune the guidelines, but this delay experts say has not been in favour of the consumers as the law allows them to make choice given their individual unique features.

The insurance companies who also would have benefited from selling annuity are also feeling frustrated as new business has not been written since the policy tussle started in November 2016.

A joint circular issued 28 Marh 2017 and signed by Agbola Pius, director, Authorization and Policy, NAICOM and BM Umar, head, Surveillance Department,  PenCom,  notified members of the public and in particular stakeholders in the Insurance and Pension industries, that both regulators have met to discuss issues pertaining to strengthening the administration of retiree life annuity as a mode of retirement benefit under the Pension Reform Act 2014 (PRA 2014).

“Specifically, both NAICOM and PenCom re-affirmed the existence of Programmed Withdrawal and Life Annuity as modes of payment of retirement benefits under the PRA 2014.”

The statement further stated that the processing and approvals of new retiree life annuity requests shall continue forthwith, while directing that all Pension Fund Administrators (PFAs) shall resume the processing of new annuity requests for retirees and forward same to PenCom for necessary approval without delay.

“PenCom shall ensure that PFAs transfer all approved premium for Retiree Life Annuity to the Operational Accounts opened by the Life Insurance Companies with PFCs.”

“We are currently reviewing the Regulation on Retiree Life Annuity which will be jointly released to the public in compliance with the PRA 2014 within 3 months of this notice.”

According to the circular, NAICOM shall ensure that Life Insurance companies comply with the above requirements.

Modestus  Anaesoronye