LASPEC tasks workers on devt of pension scheme plan

THE Director-General, Lagos State Pension Commission, Rotimi Hussain, has urged workers to acquire the right knowledge on plans under the pension scheme to guide them into a smooth retirement period.

     Speaking at the seventh pre-retirement seminar for workers recently in Lagos, he said that the pre-retirement seminar is aimed at assisting prospective retirees to adequately prepare for physical, emotional and financial well-being in retirement as well as afford them the benefit of being in a better position and frame of mind to build a comfortable and rewarding life in retirement,” he said.

     Hussain said the state was mindful of the fact that the rudiments of the scheme had yet to be fully understood by many workers, therefore necessitating the need for understanding in the scheme.

   According to him, LASPEC usually organise the seminar in collaboration with the state approved Pension Fund Administrators and insurance companies.

  The Executive Director, Technical, Folashade Onanuga, said the Lagos State Pension Reform Law 2007 allowed a retiree to choose between two options for his monthly pension.

   She gave the options as programmed withdrawal module of the PFAs or Life Annuity from a licensed life insurance company.

 “Life annuity is a regular income payment (monthly or quarterly) made to a person (retiree) for the rest of his life, in return for payment of the purchase money (lump sum premium),” she said.

 She said the life annuity provided by the insurance companies would be paid for life and the pension guaranteed for 10 years.

Onanuga said the programmed withdrawal was a product of the PFAs.

 “It is a periodic (monthly or quarterly) pension payment to a retiree from the balance in his retirement savings account for an estimated guaranteed pension period or life span,” she said.

While withdrawals are made monthly from the RSA, according to her, the balance in the RSA continues to be invested, giving it the potential for growth.

  Onanuga explained that programmed withdrawal computation is based on the template given by the National Pension Commission.

 She noted that the higher the lump sum, the lower the monthly pension in the programme.

   Onanuga said the PFAs owed the retirees the duty to enlighten and agree with them on the preferred withdrawal option.

   According to her, the PFA should obtain a signed benefit template from the retiree if the chosen option is programmed withdrawal and send a copy of signed template to LASPEC.

   “If a retiree opts for annuity, the PFA should notify LASPEC of the retiree’s choice of life insurer, obtain approval from PenCom to transfer the RSA balance after the payment of lump sum to a life insurer,” she said.