By: Moshood Ayeni
The term Next-of-Kin (NOK) is a common term used on a daily especially when it has to do with pensions and retirement claims. To many, this term has a different meaning from what it actually means. This piece is aimed at dissecting the meaning of NOK while demystifying the myths around it especially as it affects retirement benefits.
Who is a Next-of-Kin (NOK)?
According to Wikipedia, a person’s Next-of-Kin (NOK) is that person’s closest living blood relative. Investopedia also defines a Next-of-Kin as a person’s closest living blood relative and someone who may have inheritance rights, and obligations.
Usually, the NOK is the person who will be the first point of contact especially when information is needed about the appointer or in an emergency.
Importance of choosing the right NOK
At the point of opening a Retirement Savings Account (RSA), part of the information required to fill in the RSA form is the information about the NOK.
Therefore, it is important to note that RSA holders should choose a person who is a close relative that can give information about them especially during an emergency, or represent them if and when necessary.
However, please note that a NOK is not necessarily a beneficiary of the RSA holder’s retirement benefits. Nonetheless, if the intention of the RSA holder is for the NOK to be a beneficiary, then it is important that this is stated in a written Will.
Does the NOK automatically inherit the deceased Retirement Benefits?
The NOK does not automatically inherit the deceased estate. For the NOK to be a beneficiary of the deceased, he or she MUST have been named in the Will of the RSA holder, if the deceased has a Will.
If the RSA holder dies without having a Will (i.e. intestate), then he or she MUST have been named in the Letter of Administration obtained from the Probate Registry as a legal beneficiary of the deceased estate or entitlements.
Following series of complaints arising from the processing of Death Benefits especially by the NOKs, the National Pension Commission (PENCOM) had in a Circular released in 2018 stated the procedures PFAs and NOKs should follow when processing death benefits of a deceased in a bid to strengthen the processing and payments of death benefits.
Who inherits or is a beneficiary of a deceased entitlements?
For someone who died writing a Will, it is crystal clear who inherits what. Here, the NOK issue or dilemma is closed.
The issue is a bit complicated where the RSA holder died without writing a Will i.e. died intestate.
Under Nigerian intestate succession law, one cannot choose his heir based on NOK. The law rather imposes this on the person. The surviving spouse and children of an intestate who married under the Act, for example, are his heirs.
Typically, the incidence of marriage will determine who becomes the beneficiary where the deceased was married.
In conclusion, the NOK is:
- Usually the closest living relative and the first point of contact of the RSA holder.
- Authorized to provide necessary information about the person who has appointed him/her, such as confirming the identity of the person who appoints him or her.
- The person who is not necessarily the intended direct beneficiary of the deceased’s entitlements.
- The person that can also ensure that the necessary steps are taken to obtain a letter of administration from the probate registry regarding the deceased’s entitlements and claim.