Insurance industry receives N371.21bn annuity premium from PenCom

There are indications that more retirees in the country have opted for annuity plans with insurance companies in the country as the industry is revealed to have received N371.21 billion premium for retirees from the pension industry.

The amount was calculated since the inception of the Contributory Pension Scheme (CPS) in 2007 till the second quarter of the year.

It was gathered from a report by PenCom that Pension Fund Administrators paid the premium to insurance companies on behalf of retirees who opted for life annuity as their retirement payment mode.

The Acting Director-General of PenCom, Mrs. Aisha Dahir-Umar in the report stated that the (PFAs) under the supervision of the Commission also made a lump sum payment of N91.28 billion to the insurance companies in the second quarter of the year.

Owing to this, it noted that there was an increase of N24.74 billion in one year when compared to the N66.46 billion recorded in the same quarter of 2018.

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She said the Commission approved a total of 2,941 applications for retirement under life annuity during the second quarter of 2019, thus bringing the total number of retirees receiving their retirement benefits through the annuity plan to 68,857 from inception.

She added that the 2,941 retirees received N4.68 billion as lump sum payment and paid a premium of N17.53 billion to insurance companies and a monthly annuity of N184.50 million.

Mrs. Dahir-Umar said this resulted in total lump sum payment of N91.28 billion, premium of N371.21 billion and monthly annuity payments of N3.70 billion as at the end of the second quarter, 2019.

The commission, she noted, in the second quarter of 2018, approved a total of 2,652 applications for retirement under life annuity during the quarter, bringing the total number of retirees receiving their retirement benefits through the annuity plan to 54,471.

The 2,652 retirees received N2.56 billion as lump sum payment and paid premium of N14.34 billion to insurance companies. This resulted in total lump sum payment of N66.46 billion and monthly annuity payments of N2.84 billion, she said.

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