PenCom to Enforce Group Life Insurance Law

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The National Pension Commission (PenCom) has ordered all employers of labour covered by the Pension Reform Act 2014, to submit copies of the insurance certificates with the schedule of benefits of their employees to the commission.

Section 4 sub-section 5 of the Pension Reform Act stipulates that all employers of labour should set up group life insurance policy for their workforce. The policy which ensures that dependents of a deceased employee receive three times his total annual emolument was meant to cushion the effect of death on a deceased worker’s family.

PenCom, in a circular titled, “compliance with guidelines for life insurance policy for employers and submission of insurance certificates for 2020 sent to various employers stated that, “in accordance with the provisions of Section 4(5) of the Pension Reform Act (PRA) 2014 and Section 5.5 of the Guidelines for Life Insurance Policy for Employees, employers of labour covered by the PRA 2014 are required to submit copies of the Insurance Certificates with the schedule of benefits to the National Pension Commission (PenCom)”.

According to the commission, the insurance certificates shall state that all employees are covered up to an amount not less than three times their respective Annual Total Emoluments (ATE).

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