Monday 15 June 2015

Fraud Alert: Don’t pay for processing your pension, retirees warned

Having received complaints about fraudsters disguising as staff of the National Pension Commission (PenCom) and Pension Transitional Arrangements Directorate (PTAD) demanding for money to help retirees hasten the gratuity and pension collection process, stakeholders have advised retirees to be wary of the activities of fraudsters.  You don’t have to pay anybody to access your retirement benefits, they warned, writes Chuks Udo Okonta.
 
Narrating his encounter with fraudsters, a pensioner who pleaded anonymity said he got a call from someone who introduced himself as working in the Pension Transitional Arrangement Directorate (PTAD) and was willing to help him to process his gratuity and pension very fast.  

He said after series of discussions, he sent his employment details to enable the man process his pension and after some days, the person called back to demand a token of N50,000 so that he will use the money to grease the palms of the people who will endorse his file.

The pensioner said he got excited and was ready to part with the money demanded since it was very small compared to what he was expecting as gratuity and pension.  The retiree volunteered to take the cash to the imposter who rather gave him an account number to pay in the money.  

He said he told the man he was willing to bring the cash himself or pay with a bank draft but the imposter turned down the offer.  He then became suspicious and cut off from him and he has not called him again, knowing his game was up.

The case of another retiree was not too different from the one above.  His caller identified himself as a staff of the National Pension Commission (PenCom) and offered a similar assistance in return for some money to grease the palms of the officers who will approve the payment.  

He said he got suspicious and rushed to PenCom’s office for further enquiries only to find out that the caller was a fraudster.

Many retirees, particularly those under the Defined Benefits Scheme have had similar encounters with fraudsters at different times.  While some were as lucky as the pensioners above, having realised in time that the people calling them were imposters, others were not so lucky. They were duped and their financial predicaments worsened before they knew what was happening.
 
Pension Fraud, a Global Phenomenon
Fraud targeting pensioners is not a new phenomenon, it has been an age long crime, even in civilised societies.  This prompted several researches by different groups into this type of crime.  One of such researches was conducted by Citizens Advice, which alerted those approaching retirement that criminals are ever seeking new ways to defraud pensioners.

The group reviewed 150 cases of fraud involving pensioners and identified various kinds of such scams including those encouraging pensioners to move their savings into a purported 'new' pension, fake investment opportunities and those offering apparently 'free advice' and support which actually costs money.

The organisation observed that in some cases pensioners were charged a fee for a service that is not necessary, while in some other cases pensioners were encouraged to send personal information and bank details, either by email or phone.  It therefore, advised pensioners and those about to retire to be wary of the rising incidence of pension scams.

The Chief Executive of Citizens Advice, Gillian Gup observed that scammers see pensioners as prime targets, saying “there are many people looking to benefit from the new pension rules, including scammers. Fraudsters can ruin people's retirement plans by taking a portion or all of a victim's pension pots.”

In Nigeria, Many retirees are victims of pension fraud, particularly those that retired under the Defined Benefits Scheme (DBS).  Many have parted with various amounts of money to induce some non-existing pension officers to approve their gratuity and pension.  Some others have received calls, telephone messages and electronic mails demanding for money to speed up the processing of their pension and gratuities only to be duped by fraudsters. 

Fraudsters often succeeded in duping pensioners because many workers close to retirement age are usually confused about how to access their retirement benefits. Dependants of missing and deceased workers and retirees also fall victims to fraudsters.

Stakeholders in the pension industry, including regulator, retirement savings managers, and pension experts have all warned retirees and workers nearing retirement age to be wary of the activities of pension fraudsters.  “You are not required to pay money to anybody to be able to access your pensions and those demanding tokens to help you process your gratuity and pension are fraudsters. Be warned,” they stressed.
 
Documentation under Defined Benefits Scheme
The Pension Transitional Arrangement Directorate (PTAD), the body charged with the management of Defined Benefits Schemes in the country has introduced a biometric data capturing programme to provide a reliable and comprehensive database of pensioners under the scheme in the country.  

Eligible pensioners under this scheme are expected to participate in a biometric verification exercise conducted by the agency for the different organisations under its purview.

Showing up personally and presenting all relevant employment and retirement details during the exercise and follow-up ones is the only thing a retiree under the scheme is expected to do to get his pension monthly.  Nobody can influence this process so anybody asking a retiree to pay money to do so on his behalf is a fraudster.

According to the PTAD’s Director in charge of the Pension Support Department, Mrs. Roz Benokagbue the agency makes sure that the exercise is seamless and that participating retirees enjoy a level of comfort during the exercise.

“We are taking the full biometric capture because the whole point is that we will never have to do this again. This is the only time we will call them together again for verification. In the future, we will just have a mild verification every six months, which will only require their fingerprint. This is just to show that they are still alive. We now have their full details and information,” she assured.
 
Documentation under CPS
Under the Contributory Pension Scheme (CPS), a worker who retired mandatorily on attaining 60 years of age or 35 years in service or retired voluntarily on attainment of 50 years of age, is expected to present an official notice of retirement/exit from last employer, his last pay slip not less than three (3) months from the date of retirement (stamped and signed by employer) or any evidence of last annual remuneration and a certified true copy of the Retirement Bond certificate if he is retiring from the public sector.

If he is retiring from the private sector or self-funding Ministries, Department and Agencies (MDA), he will provide evidence of any accrued pension entitlements not remitted into his RSA and a confirmation of any contributions owed by his employer as well as an evidence of the terms and conditions of employment for those retiring from the private sector.

In addition to the above, the retiring worker is expected to submit a duly completed Retirement Withdrawal form, two passport photographs, completed Programmed Withdrawal Agreement and Retiree Indemnity form deposed to before a Commissioner of oath or Notary Public, Birth Certificate/Age Declaration and photocopy of any form of identification (i.e. Driver's license, National ID and more).
If one is retiring on medical ground, in addition to the above, he is expected to present a certified true copy of a medical certificate issued by a properly constituted Medical Board or a suitably qualified physician.

In the case of deceased or missing worker or retirees, the beneficiary under a Will or an Administrator appointed under a Letter of Administration will access the balance in the deceased or missing person’s Retirement Savings Account (RSA) in line with the Pension Reform Act, 2014 or the Regulations for the Administration of Retirement and Terminal Benefits en-bloc.  

The RSA balance of a deceased worker may consist of proceeds of the Group Life Insurance Policy, if he was in employment when he died; the accumulated contribution and accrued pension benefit.
 
About PTAD
Established August 2013 in line with provision of Section 30(2) (a) of the Pension Reform Act, 2004 and now Section 42 (1) of the Pension Reform Act 2014, the PTAD took over the management of the Defined Benefits pension schemes of federal parastatals and agencies and has been implementing a new structure, which is a clear departure from the old system and also introduced a new orientation to service delivery to meet the needs of pensioners. 

The Pension law directed Directors of the Civil Service Pension Department, Police Pension Department and Customs, Immigration and Prisons Pension Department to report to the Director General of the Department.  Also, all the Boards of Trustees of pension schemes being operated by FGN parastatals report to PTAD. 

The agency however prides itself as “progressively working hard” to sanitise the pension administration system and restore public confidence through effective management, accountability and transparency and alleviating the sufferings of pensioners through regular and prompt payments, constant communication and easy accessible.

The Directorate also said it is improving service delivery to pensioners, ensuring effective planning and management of pension under the Defined Benefit Scheme and ensuring transparency and accountability in the management of pension funds while restoring confidence and trust in the system.

Meanwhile, PenCom, PTAD as well as other pension operators and stakeholders have reminded retirees that pension is their right and they do not need to pay anybody to influence the verification and collection process on their behalf.  Patronising imposters disguising as sympathisers for this purpose would amount to self-destruction and making oneself vulnerable to fraudsters.

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