Demand for benefits annuity increases

Matthew Otoijagha
The demand for benefits annuity has in recent times soars, a report by the National Pension Commission (PenCom) has revealed. According to the pension regulator, 5,243 retirees subscribed to benefits annuity in the third quarter of 2017 as against 2,181 in the same quarter 2016
PenCom in the report noted that it approved a total of 5,243 applications for annuity retirement plan during the third quarter 2017, bringing the total number of retirees receiving their retirement benefits through the annuity plan to 41,688.
The regulator maintained that the 5,243 retirees received N4.30 billion as lump sum payment and paid annuity premium of N27.74 billion to insurance companies cumulating to a total of N53.98 billion and N2015.85 billion as lump sum payments and annuity premium respectively.
The retirees, according to PenCom were receiving average monthly of N1.85 billion as at the end of September, 2017. The commission said it approved a total of 2,181 applications for annuity retirement plan in September 2016, adding that the retirees paid premium of N10.75 billion to insurers.
Investigations revealed that the surge accrued from the campaign by some labour leaders who are pushing for annuity because it pays as long as retirees live.
Recall that benefits annuity business was halted in the first quarter of 2017 by PenCom, as life insurers were mandated to open operational accounts with Pension Fund Administrators (PFCs). The benefits annuity policy led to loss of over N10 billion as willing retirees were denied the privilege to buy annuity from underwriters.

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