PenCom to Enforce Group Life Insurance Law
The National Pension Commission (PenCom) has ordered all employers of labour covered by the Pension Reform Act 2014, to submit copies of the insurance certificates with the schedule of benefits of their employees to the commission.
Section 4 sub-section 5 of the Pension Reform Act stipulates that all employers of labour should set up group life insurance policy for their workforce.
The policy which ensures that dependents of a deceased employee receive three times his total annual emolument was meant to cushion the effect of death on a deceased worker’s family.
PenCom, in a circular titled, “compliance with guidelines for life insurance policy for employers and submission of insurance certificates for 2020 sent to various employers stated that, “in accordance with the provisions of Section 4(5) of the Pension Reform Act (PRA) 2014 and Section 5.5 of the Guidelines for Life Insurance Policy for Employees, employers of labour covered by the PRA 2014 are required to submit copies of the Insurance Certificates with the schedule of benefits to the National Pension Commission (PenCom)”.
According to the commission, the insurance certificates shall state that all employees are covered up to an amount not less than three times their respective Annual Total Emoluments (ATE).
“Employers that have not yet submitted copies of insurance certificates for the current year to the commission, are therefore advised to do so before 31 March, 2020 failing which the National Pension Commission would consider such employers in default of Section 4(5) of the Pension Reform Act (PRA) 2014” PenCom stated”.
According to the commission, the guidelines for Life Insurance Policy for employees can easily be accessed and downloaded from its website, adding that compliance with PRA 2014 was not complete without the Group Life Insurance Policy.
The commission in a similar notice to members of the public on life insurance policy as one of the employees’ rights and condition of service stated, “this is to remind all employees in the public service of the federation, federal capital territory and states that have implemented the Contributory Pension Scheme as well as private sector, that it is their rights; under Section 4(5) of the PRA 2014 to have Life Insurance policy taken on their behalf by their employers for an insured amount of not less than three times their annual total emolument.”
The commission, in the notice to the employees further stated that employees should note that employees were also required to ensure that all pension contributions deducted from salaries and/or contributed by employers are remitted to the Pension Fund Custodian (PFC) by the employer not later than seven working days from the date of payment of their salaries.
The commission advised employees to report where the employer fails to do, “procure the minimum required life insurance policy in their favour; submit the evidence of compliance with life insurance policy to the commission and place the certificate in a conspicuous place within the organisation; and remit the deducted pension contributions into their retirement savings accounts.”