THE ANNUITY Manager, SANLAM Life Insurance, Mr Victor Ikechukwu, has urged civil servants due for retirement to take up Annuity Policy for effective management of their pension.
Ikechukwu disclosed this on Monday in Enugu while speaking with the News Agency of Nigeria (NAN) on pension management.
The insurance expert explained that Annuity was operated by the National Insurance Commission (NAICOM) and it was paid for the lifetime of a pensioner.
“It is a pension package that a pensioner receives till death and it is programmed.
He however, said that the package was different from the Programme Withdrawal offered by the Pension Fund Administrators (PFA) which lasted once the money was exhausted.
He said that once the money was exhausted, the pension stopped automatically unlike the annuities which were covered by insurance.
Ikechukwu also advised retiring civil servants, that at the commencement of retirement, they should demand for pension template of payment.
According to him, the template contains pension option policies and rules guiding them and the statement about their payable gratuity.
“The template gives two pension policy options, which is Annuity Policy and Programme Withdrawal Policy.
“The Annuity Policy is a better option, which include paying the retiree for life as long as he or she is alive.
“Two, since the Annuity Policy is like a Life Assurance Policy, the retiree got more monthly retirement pension unlike his other colleagues in the Programme Withdrawal Policy.
“The difference between the Annuity Policy and the Programme Withdrawal Policy most times is not explained to the retiree to make informed choice.
“Rather most pension managers hurry the retiree up and tell him or her to go home, while subjecting them to the Programme Withdrawal Policy,” he said.
Ikechukwu alleged that the pension managers, who intentionally put retirees to Programme Withdrawal Policy, did so on their own in order to continue to manage the pension of retirees after gratuity must have been paid.
“Most times, those under Programme Withdrawal Policy, their total pension money runs out between 10 and 13 years while alive.
“The reason why it might extend beyond 10 years is the interest accruing from the investment made with the bulk money of the pension in the first place,” he said.
He, however, noted that for the both policy, once retiree died before 10 years, his or her family members could come and claim his or her remaining retirement pension benefits.
“But if the retiree dies after 10 years, the pension will automatically stop notwithstanding the policy.
“The next of kins or family members cannot have any claim after the deceased retiree must have enjoyed his gratuity as well as pension for over 10 years.” (NAN)
