Pension Lump Sum
Hi guyz, I am in the benefit administration unit of my company as a youth corper, what we do basically is to calculate the benefit to be paid to retirees, ie their 25% (below 50) or Lump sum (above 50) and what their monthly payments would be. Some retirees disgruntled about how little the monthly payment is may opt for an annuity with an insurance company. On request by the retiree, we stop his monthly payment and move his money to any insurance company of his choice on receiving his annuity agreement. We also initiate payment into retirees’ accounts by preparing the payment instruction to the custodian who has an intermediary bank that facilitates the transfer from our account into the retiree’s account.
I get a lot of phone calls from retirees asking about the documents they need to submit in order to apply for their 25% or Lump sum. Some think that it is instant, and once they send the application letter, payment would be made immediately into their account. This is very wrong because Pension fund administrators are required by law to obtain some necessary documents from the retirees before they can start processing the application.
So let us now look at the documents you need to submit to your pension fund administrator in Nigeria in order to access your 25% (Below 50) or Lumpsum (above 50) from them.
Documentary requirements for Loss of Job in Nigeria
For your 25% application, you need the following documents:
- Resignation / Termination Letter: This is to show that you have truly resigned, or that you have been laid off. The resignation letter obviously comes from you. The normal process is that you drop it with you employer, and they acknowledge receipt by accepting or rejecting your resignation. You can drop both your resignation letter and acknowledgement by your employer. As regard the termination letter, this is given to you by your employer when your services are no longer needed. It may be due to redundancies, restructuring, and fraud amongst a few.
- Birth certificate or declaration of your age: Your birth certificate or declaration of age is very vital in the process. It is used to determine if it is the 25% or lump sum your pension fund administrator would process for you. Although the birth date in the employer confirmation supersedes the date in the birth certificate and declaration of age, they are still very important in the application process.
- 2 Recent passport Photographs
- Signed Application letter with pin Number: This is to show what exactly you are applying for, if it is 25%, lump sum or annuity. Sometimes retirees are not aware that the date on their employer’s confirmation letter differs from the date on their declaration of age. They apply for lump sum because their declaration of age says they are above 50 years of age, but we have no choice but to process 25% for them because their employer’s confirmation says otherwise. Disgruntled retirees keep on calling, but we explain it to them and clarify the matter.
- Contact Details & Best friend’s phone
- Employer’s Confirmation of Accrued Rights letter: This is the employer’s confirmation discussed earlier. The employer sends a confirmation letter to the pension fund administrator, confirming that all pension contributions have been paid to them, and also confirming the age and retirement date of their former employee.
- Means of Identification: National ID/ Drivers license/ International Passport/ Voters Card
- Duly Filled and Stamped Bank Confirmation Form: The bank confirmation form is provided by the pension fund administrator. It is to be taken to your bank for the bank officer to fill in your account name, account number and the sort code number. There is also a column for you to fill in your name, your Pin number ( Pension number starting with PEN…..)
Documentary requirements for Lump sum in Nigeria
The requirements for Lump sum payment is quite similar to that of 25%, there are about three extra documents to be submitted for processing. They are:
- Retirement / Termination letter: Lump sum is for people above 50 years, and most of them usually retire from work. The retirement letter issued by their employer is required for processing their application. In the case of termination, this means that you have been laid off, but since you are above 50 years of age, the lumpsum would be processed for you. You are required to bring your retirement or termination letter to process your lump sum.
- Last Pay slip: This is the last pay slip for the month prior to your retirement or termination. This is very important because it is used to draw up your template, and ascertain how much you would be receiving every month after the lump sum has been paid to you.
- Programmed Withdrawal Agreement Form – (form should be obtained from PFA): This is a form given to you by your PFA. You should read it carefully because the terms and conditions of procedures and payments are listed here. If you are okay with it, then you can sign and submit it back to your PFA.
After receiving complete documents, the benefit administrator begins processing your application. They first open a file for you, prepare an AS and when schedule, and then send it to Pencom (national regulatory body) for approval. On receiving the approval, they initiate payment into your account with their Pension custodian.
So guyz, I hope this would help you know what you need inorder to access your money faster, as it breaks my heart to see retirees completely lost and having to wait a long time before getting their hard earned money.