Rights of pension contributors

IN THE last article, we looked at some rights of pension contributors which included investments and the rights to benefits. This week we conclude by looking at other general rights that pertain to pension contributors.
Right to information
Other than the booklet containing the rules of the scheme, each member is entitled to receive a benefit statement showing the member’s actual benefits and the member’s accrued portable benefits every year.
Members also have a right to view financial statements in whichever way they are presented i.e. be they quarterly returns or audited financial statements.  This will enable members to be well informed of the operations of and performance of funds that will form the basis of their old age salary.
If the scheme is about to be wound up or simply deregistered due to problems from the sponsoring employer or by whatsoever reason, the scheme members have a right to be notified of such a measure as a requirement of the law that regulates the pension industry.
In the event of death before normal retirement date, contributions towards retirement benefits together with interest can be refunded to the surviving spouse and children or to the administrator as may be specified by the will.
Other schemes provide for a pension amount calculated using certain arithmetical and statistical factors by pension experts known as actuaries.
This can be paid to the surviving spouse and the children until the last one reaches age 21 or is at a recognised education institute.
A contributor discharged from employment due to ill-health is also entitled a similar benefit as the one above.
When leaving the company’s service before normal retirement date, the contributor has options on what to do with his or her entitlement depending on each scheme plan rules.
The contributor can either take deferred pension commencing on normal retirement date for the amount secured by the contributions during the membership period of the scheme, transfer an amount in substitution to the pension benefits to any other scheme which is approved by all the applicable authorities and provided that employer agrees, or take a lump sum of both the accrued member’s and employer’s contributions together with interest as an immediate benefit.
In case of deregistration of the pension scheme by the Registrar, the contributor has rights in full of the claim against the scheme like any other creditor. The pension law provides for how the assets should be distributed when they are found not to be sufficient for the full discharge of the scheme’s obligation to its members.
Right to sue
A contributor has a right to institute legal proceedings if a manager or trustees or anyone entrusted with the custody of the funds is contravening with law, pension plan rules or regulations so as to protect their contributions under a pension scheme as provided for under the laws.
The accrued pension benefits of a contributor are protected against any attachment with regard to both the employee or employer contributions despite any court order or judgment or anything contained in any other law other than the scheme rules and law governing pensions.  Furthermore, the said contributions do not form part of a scheme member’s assets or the sponsoring employer’s assets in the event of bankruptcy.
Finally, it is important that scheme members understand their pension rights.  This will be achieved by insisting on pension schemes to disclose as much information as possible.
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