The Federal Executive Council (FEC) has approved N9.24 billion as premium for insurance firms that will manage the group life assurance for federal civil servants.
The Minister of Information and Culture, Lai Mohammed, who announced this at the Federal Executive Council meeting on Wednesday in Abuja, said the life assurance is for federal government employees, public servants, para-military, as well as the intelligence community for the year 2021-2022.
The group life insurance is a joint regulation of the National Insurance Commission (NAICOM) and National Pension Commission (PenCom).
Section 9 (3) of the Pension Reform Act 2004 (now PRA 2014) requires that every employer, to which the Act applies, to maintain Life Insurance Policy in favour of the employee for a minimum of three times the annual total emolument of the employee. The policy provides cover to the insured against death.
Mohammed said: “On behalf of the Head of Civil Service of the Federation, I will like to report that council today (Wednesday) approved the award of contract for the appointment of insurance companies for group life assurance for federal government employees, public servants, para-military and the intelligence community for the year 2021-2022 in the sum of N9, 248. 995, 907 and this premium is for a period of 12 months.
“This is part of the government’s welfare programme for our public employees so that in case of death, they are assured that there would be compensation,” Mohammed said.
NAICOM and PenCom had released regulatory guidelines induced by the enactment of the Pension Reform Act of 2004 which made it mandatory for any employer in the Federal Public Service, Federal Capital Territory and the private sector to establish a contributory pension scheme from which payments of retirement benefits will be made to retiring employees.
As provided for by the Act, the modalities for payment of retirement benefits are through life annuity, which is obtainable from Life Insurance companies or through Programme Withdrawal, which is obtainable from Pension Fund Administrators. Either of the two methods is available depending on the choice of the employee.
In August 2020, the federal government had paid about N15 billion premium under the group life insurance scheme to insure over 89,000 workers across the country.