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PFA reacts to 50% Lump Sum judgement, awaits appeal court decision

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Sigma Pensions Limited says it is committed to meeting its customer’s expectations and remains wholly guided by the law governing pension administrations in Nigeria

The Pension Fund Administrator (PFA) is reacting to the judgment at the National Industrial Court granting retirees access to 50 percent lump sum of their Retirement Savings Account (RSA) balance at retirement.

The recent court verdict in the case of Rakiya Bakari Girei vs. Sigma Pensions Limited, National Pension Commission, and Attorney General of the Federation follow a similar case in which PenCom and another PFA obtained a stay of execution and are currently appealing the court’s decision.

Sigma Pensions has declared that, as a responsible organization that respects regulatory authority and the rule of law, it will wait for the outcome of these procedures before acting.

“Following the recent National Industrial Court judgment on the interpretation of the application of the lump sum payment to retirees, Sigma Pensions maintains a position of strict obedience to the law and the down rules governing the industry.” the organization noted.

“The terms of the Pension Reform Act (PRA) 2014, which repealed the old PRA 2004, govern Nigeria’s pension industry. The 2014 Act, which does not specify a percentage that a retiree may receive as a lump sum, establishes the National Pension Commission (PenCom) as the industry’s regulator and gives it the authority to, among other things, issue guidelines, rules, and regulations for the investment and administration of pension funds.

“PenCom, in accordance with this mandate, provides instructions and rules on a regular basis to govern the actions of Pension Fund Operators (PFOs), which PFOs must carefully follow.

“PenCom has therefore provided the Pension Fund Administrators (PFAs) with a Programmed Withdrawal Template (PWT) and a benefits computation tool ” the PFA noted.

It remains to be seen the eventual outcome of this case as it poses a significant shift in the ways retirees are paid their lump sum amount at retirement.

Source


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