FG Approves N2bn for Employees Life Insurance
- By Rosemary Onuoha
- Published February 22nd, 2010
- News
- Unrated
AFTER dilly dallying for over five years since the creation of the new pension scheme, the federal government has finally approved the sum of N20.2 billion for its employees.
Mrs. Dora Akunyili, minister of information, who relayed the approval, regretted that over the years, the federal government was unable to provide Group Life Insurance cover for all its employees as stipulated in the Pension Reform Act because the premium payable, as calculated on the basis of agreed rates, was exorbitant and was never fully covered in the budget.
According to her, “The sum of N20.2 was proposed in the 2010 budget for the insurance scheme. Parastatals which get their funding on first line charge would also have to apply the negotiated rates for the procurement of covers for the employees.”
BusinessWorld notes that the approval is in line with the Section 9(3) of the Pension Reform Act which provides that employers must provide insurance policies worth at least three times the annual total emolument of the employees.
Akunyili, who made the announcement in Abuja, said the acting president brought a memo seeking the council’s approval for the standardization of rates applied in the procurement of Group Life Assurance for employees of the federal government.
The approved rates for federal government employees in 2010, according to her, are: “Core civil servants 3.0 per mille; para-military staff 3.15 per mille; police and security 4.54 per mille and armed forces 3.98 per mille. The council equally approved that only 17 companies will provide Group Life Insurance for Federal Government employees in 2010.”
According to the minister, the office of the Accountant General of the Federation will continue to pay the premium directly to the underwriters, while the common services office in the office of the head of service administers the process, working with a consortium of five insurance brokers.
Mrs. Dora Akunyili, minister of information, who relayed the approval, regretted that over the years, the federal government was unable to provide Group Life Insurance cover for all its employees as stipulated in the Pension Reform Act because the premium payable, as calculated on the basis of agreed rates, was exorbitant and was never fully covered in the budget.
According to her, “The sum of N20.2 was proposed in the 2010 budget for the insurance scheme. Parastatals which get their funding on first line charge would also have to apply the negotiated rates for the procurement of covers for the employees.”
BusinessWorld notes that the approval is in line with the Section 9(3) of the Pension Reform Act which provides that employers must provide insurance policies worth at least three times the annual total emolument of the employees.
Akunyili, who made the announcement in Abuja, said the acting president brought a memo seeking the council’s approval for the standardization of rates applied in the procurement of Group Life Assurance for employees of the federal government.
The approved rates for federal government employees in 2010, according to her, are: “Core civil servants 3.0 per mille; para-military staff 3.15 per mille; police and security 4.54 per mille and armed forces 3.98 per mille. The council equally approved that only 17 companies will provide Group Life Insurance for Federal Government employees in 2010.”
According to the minister, the office of the Accountant General of the Federation will continue to pay the premium directly to the underwriters, while the common services office in the office of the head of service administers the process, working with a consortium of five insurance brokers.
