PenCom stops payment for deceased workers without RSAs

The National Pension Commission says the processing of Death Benefit Accounts for death benefits claims will be discontinued with effect from February 1, 2020.

It said all Pension Fund Administrators had been directed to stop the opening of the DBAs with effect from January 31, 2020.

The commission stated this in a notice to the general public on ‘Discontinuation of Death Benefits Account for deceased employees under the Contributory Pension Scheme’.

PenCom said Section 11(1) of the Pension Reform Act 2014 mandated every eligible employee to maintain a Retirement Savings Account with a PFA of his choice.

The Act also mandated every employer to open a nominal RSA within six months of assumption of duty for the employee who failed to open an RSA in accordance with section 11(5) of the PRA 2014.

Employers were required to ensure that RSAs were opened for all their employees, the notice said.

Prior to the PRA 2014, PenCom stated that the DBA had been used by beneficiaries to access the benefits of the deceased employees who did not open RSA during their lifetime.

“However, pursuant to the above cited statutory provisions, this practice is no longer valid,” PenCom stated.

The commission reiterated the need for all employees to ensure that they opened the RSAs with any PFA of their choice.

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