Using anti-money laundering measures to curb pension fraud in Nigeria
| DOI | https://doi.org/10.1108/JFC-12-2018-0126 |
| Pages | 1341-1348 |
| Published date | 28 January 2020 |
| Date | 28 January 2020 |
| Author | Ehi Eric Esoimeme |
| Subject Matter | Financial crime,Accounting & Finance,Financial risk/company failure |
Using anti-money laundering
measures to curb pension
fraud in Nigeria
Ehi Eric Esoimeme
DSC Publications Ltd., Lagos, Nigeria
Abstract
Purpose –The purpose of thispaper is to propose a new approach to curbing pension fraud in Nigeria.The
approach involves the use of anti-money laundering tools, procedures and expertise to advance the fight
against pension fraud in Nigeria. The guidance is non-binding and does not override the purview of the
National Pension Commission.The intention is to build on the revised procedures on the processing of death
benefits and to complement existing circulars and guidelines issued by the National Pension Commission,
includingin particular the guidelines for compliance officers.
Design/methodology/approach –The analysis took the form of a desk study, which analyzed
various documents and reports, such as the Fin ancial Action Task Force (2012- 2018), International
Standards on Combati ng Money Laundering and the Finan cing of Terrorism and Prolifer ation (the FATF
Recommendations) ; the Financial Action Task Force G uidance on the Risk-Based Approac h to Combating
Money Laundering and Terrorist Financing: High Level Principles and Procedures; National Pension
Commission Regulat ions for Compliance Officers; the Joint Money Laundering Steering Group Guidance
for the United Kingdom Financial Sector Part I, June 2017 [Amended December 2017] and the Federal
Financial Institutions Examination Council (FFIEC) Bank Secrecy Act/Anti-Money Laundering
Examination Manual 2 014.
Findings –This paper determined that a strong due diligence process where the owner of the pension
account and the next-of-kin/legal beneficiary are duly identified before the establishment of a business
relationshipis capable of reducing the risks associated with pension fraud to the barest minimum.This paper
also determined that anti-money laundering measures, such as record keeping, suspicious transactions
reporting, training for anti-fraud/money laundering compliance and an independent audit of systems and
controlscan help curb pension fraud.
Research limitations/implications –Pension fraud involves the useof deceit or misrepresentation in
connection with a pension claim. There are many different kinds of pension fraud, but the type where the
fraud is aimed at stealing a person’s pensionfunds is what this paper is concerned with.
Originality/value –Althoughmost publications on pension fraud are focused on anti-fraudmeasures, this
paper focuses on theanti-money laundering measures which can be used by PensionFund Administrators to
curb pensionfraud.
Keywords Record keeping, Due diligence, Pension fraud, Pension fund administrators,
Suspicious transactions reporting, Know your employee
Paper type Research paper
1. Introduction
Following series of complaints from retirees, who alleged that Pension Fund
Administrators (PFAs) have wrongfully paid their death benefits to their next-of-kin or
legal beneficiaries while they are still alive and in active service without their consent
(The Punch, 2018), the National Pension Commission of Nigeria, on the 3rd of October,
2018, revised its procedures on the processing of death benefits by proposing the
following measures:
Pension fraud
in Nigeria
1341
Journalof Financial Crime
Vol.27 No. 4, 2020
pp. 1341-1348
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-12-2018-0126
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