14 insurance firms earn N10.1bn from pension in three months

Fourteen insurance companies offering life annuity to retirees under the Contributory Pension Scheme received N10.1bn as premium in the fourth quarter of last year.

Life Annuity is a series of monthly or quarterly payments paid to a retiree for life and is jointly regulated by the National Insurance Commission (NAICOM) and National Pension Commission (PenCom).

The Director-General, PenCom, Mrs Aisha Dahi-Umar, stated this in a report, adding that the amount was approved for payment to 14 companies as premium in return for total monthly and quarterly annuities of N111.68.

According to her, the commission granted approval to 1,596 retirees during the quarter under review.

A total lump sum of N6,284,179,444.33 was approved for payment to the retirees, she added.

She said retirees could buy a life annuity contract by paying a portion of his or her Retirement Savings Account (RSA) as premium to an insurance company, which in turn provides the monthly or quarterly payments, subject to the regulations jointly issued by PenCom and the NAICOM.

According to her, the commission ensures that pension contributions are safe.

She said, “This is achieved through the separation of the investment and custody functions between PFAs and PFCs. Furthermore, there is effective monitoring and supervision through daily monitoring of the investment decisions made by the Pension Fund Administrators (PFAs) in order to ensure compliance with the PRA 2014 and the investment regulation.

“Moreover, there are stringent provisions in the Regulations for the investment of pension fund assets that ensure the ring fencing of the assets and allowing investments only in instruments with minimal risks.

“There is also a sealed guarantee such that in case of any infraction, the Pension Fund Custodian (PFC) or its parent company will pay any amount that may be lost due to the infraction.”