Pension's Update - Group Life Insurance and NSITF

Proshare

Friday, May 10, 2013 4:06 PM / ARM Pension

 

Here is a quick ‘heads-up’ on Group Life Insurance and the Nigeria Social Insurance Trust Fund (NSITF).

 

Group Life Insurance

Every employer is expected to maintain a life insurance policy in favour of each of its employees. The policy must be for at least three times each employee’s annual total emolument and is to be purchased from a life insurance company licensed by the National Insurance Commission. The cost of this insurance policy shall be borne by the employer and would be subject to renewal every twelve months.

 

In the event that an RSA holder becomes deceased while in service, the life insurance company would pay the insurance claim into the RSA of the deceased individual and this would be paid, along with the other accrued pension benefits (if any), to the deceased’s beneficiary(ies) as stated in a Will or letter of administration. Of note, the life insurance policy will not cover individuals that are no longer in employment.

 

Why not take advantage of the opportunity to save more while reducing your tax liability.

 

NSITF (Nigeria Social Insurance Trust Fund)

The Nigeria Social Insurance Trust Fund (NSITF) (formerly National Provident Fund (NPF)), managed a defined contribution scheme for the organised Private Sector prior to the commencement of the Contributory Pension Scheme. Of note, the Pension Reform Act (PRA), 2004, states that any contributions to NSITF prior to the commencement of the Act must be transferred to a Pension Fund Administrator after five (5) years from the commencement of the Act which in this case became effective in 2009.

 

There are currently two ways to apply for the transfer of your NSITF contributions into your Retirement Savings Account. The first is by way of an individual application i.e. an RSA holder applies through his/her PFA by submitting a completed NSITF transfer application form, a valid means of identification and an original NSITF certificate/NPF card. However, clients without an original NSITF certificate can submit an indemnity letter duly stamped in a High Court together with a sworn affidavit for loss or non-receipt of NSITF certificate.

 

In the alternative, an employer can apply on behalf of its current employees, who were contributors to the NSITF, by preparing a schedule containing the names of these employees, their NSITF number, PFA name and RSA PIN. This schedule would then be sent along with a letter of confirmation to Trustfund Pensions Plc, which is charged with the responsibility of administering NSITF funds, for processing.

 

Why not take advantage of the opportunity to save more while reducing your tax liability.

 

For further enquiries, you may contact ARM Pension’s dedicated Customer Service Help Desk by calling 01-2715000 or send them a mail at info@armpension.com

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