The Nation Newspaper

Category: Pension

  • ‘Anchor agents contributed 23% to gross premium income in 2015’

    Insurance agents in Anchor Insurance Plc have contributed about 23 per cent to the firm’s gross premium income in 2015,the Managing Director, Mayowa Adeduro, has said.

    He made this known during the company’s New Year and get together party in Lagos just as the company rewarded some of the agents.

    He said one of the agents, Oladipo Oyawoye, made a total of N45 million sales. According to him, the overall agents however contributed 40 per cent to the company’s bottom line in terms of profitability.

    He said the new year and get together party is held every year to appreciate its agents and staff members that have contributed immensely to the company’s growth.

    Adeduro said: “The retail business is a big area of growth in Nigeria for insurers because of the population. Without retail insurance, the industry cannot really reach the people at the grassroots.

    “If just a single telecommunication company has over hundred million Nigerians in their platform, why can’t any insurance company be proud of having five million Nigerian as registered policy holders?

    “I believe that if the retail business is taken seriously by the insurance industry, the industry should be able to create jobs for Nigerians by empowering the youth through product innovations. These products will help to alleviate the suffering of the people in the grassroots and thereby create jobs for unemployed Nigerians.”

    The Anchor boss said this is the vision they have in Anchor insurance away from oil and gas business. “This is the vision we have in Anchor insurance away from oil and gas business. Yes we are still in the business of oil and gas no doubt but a situation where you do a business and 70 per cent of that business goes to foreign reinsurance is no business. We are thinking of a business you will do in Nigeria and retain in Nigeria and contribute to our bottom line.”

    The company has been able to sustain the agents by building partnership with them and let them see the company as their own. We have sustained a long-time relationship that goes beyond being an agent but partners in the business of retail. The company has agency network of over 300 spread across the country while some of the agents also have sub-agents who work for them,” he added.

  • Insured losses from December U.K. storms may hit $1.89b

    Insured losses from the string of floods that hit the United Kingdom in December likely will reach about £1.3 billion ($1.89 billion), the London-based Association of British Insurers said.

    So far insurers in the United Kingdom have made emergency payments of about £24 million ($34.8 million) to policyholders affected by storms Desmond, Eva and Frank, the ABI said in a statement

    The ABI said that £15 million ($21.8 million) of those payments had been made to businesses.

    Of the roughly 15,000 claims received so far, about 5,000 are from commercial policyholders, the ABI said.

    “The impact of the flooding will be felt for many months to come in affected areas,” James Dalton, director of general insurance policy at the ABI, said in the statement. “Cleaning, drying out and repairing flood-damaged properties is a major undertaking. Insurers and their experts will be there for the long haul to help communities rebuild and repair,” he added.

  • CPS: 18% contribution rate increases employment costs

    CPS: 18% contribution rate increases employment costs

    The increase in employer’s compulsory contribution rates from 7.5 per cent to 10 per cent in the Contributory Pension Scheme (CPS) as required in Section 4 (1) (a) of the Pension Reform Act (PRA) 2014, has significantly increased the employment costs, an Actuarial Scientist and Chartered Insurer, Dr. Pius Apere has said.

    Apere, who is also the Deputy Managing Director of Linkage Assurance Company Plc, made this known in a report made available to journalists in Lagos and titled: “The Implications of PRA 2014 on Management of Private Sector Gratuity and Pension Schemes”.

    The expert said that due to affordability, companies may need to review the levels and design of their total employee benefit packages like gratuity schemes.

    He pointed out that this review would pose a greater challenge to employers without an actuarial input.

    According to him, the statutory regulation, PRA 2014, does not give any guidelines on pension scheme valuation method leaving the choice of valuation method at the discretion of the actuary.

    He said this has led to non-standardisation of valuation results, which makes peer reviews and comparative analysis quite impossible for regulatory purposes.

    He explained that employers operating unfunded (PAYG) gratuity schemes tend to use the book reserving methodology being the most appropriate valuation method for unfunded schemes

    He noted that this requires making provisions in the company’s accounts for unfunded benefit liabilities payable in the future for which no funds have been set aside, adding that the balance sheet of the company will show the full value of the unfunded benefits as liabilities of the company and there will be no specific assets earmarked to provide the benefits.

    He stressed that the challenges of book reserving are insecurity of reserves, liquidity problems, overstatement of profits for taxation and insecurity of benefits.

    He said: “The major stakeholders, namely sponsors, regulators and operators require actuarial services in order to effectively manage the private sector gratuity and pension schemes. Regulators require that defined benefit –gratuity or pension schemes must always have appropriate and adequate assets available to pay the benefits. The financial assessment framework which defines the statutory funding objective, is normally part of the Pensions Act and sets out the requirements for the financial position of a gratuity or pension fund.

    “A gratuity or pension fund’s financial position is reflected largely by the coverage ratio. This expresses the relationship between the fund’s assets and the liabilities to be paid in the future. There should be a minimum coverage ratio. For instance, 105 per cent, that is, the assets must amount to 105 per cent of the liabilities.

    “However, Section 50 (2) of PRA 2014 only specifies that any defined benefits scheme in the private sector shall undertake an actuarial valuation to determine the adequacy of the pension fund assets, but without stating clearly the level of adequacy. For instance, there was no minimum coverage ratio required which is a regulatory challenge. The above implies a minimum coverage ratio of 100 per cent. (i.e. the assets must amount to 100% of the liabilities which no doubt is likely to create an insolvency risk for private sector schemes, particularly when there is volatility in the financial market.

    “In addition to the minimum coverage ratio, a gratuity or pension fund must also hold enough buffers to be able to cope with financial setbacks or volatility in the financial market. The size of these buffers depends on many factors, but for an average gratuity or pension fund the required coverage ratio including the required buffers is approximately 125 per cent. On average, the greater the investment risks and the higher the average age in the gratuity or pension fund, the higher the buffer requirements.”

    Apere added that the determination of the level of buffers is a task that requires actuarial techniques, having considered the risk appetite of the scheme.

  • FBNInsurance donates to motherless homes

    As part of activities to round off its 5th anniversary celebrations, FBNInsurance Limited has paid a visit to Heritage Homes & Orphanages, Anthony and the Lagos State Old Peoples’ Home, Yaba, Lagos.

    At the Heritage Homes, the company presented a cheque of N250,000 as well as various gift items donated by staff members of FBNInsurance in the inaugural edition of the FBNInsurance Staff Gift Drive aimed at donating clothing items, toys, groceries to the less privileged.

    The same gesture was extended to the Lagos State Old Peoples’ Home, Yaba where the company donated  care items, groceries, beverages, fabrics and a cheque of N250,000 which was received on behalf of the Home by the Chief Matron, Mrs. Feyisayo Olaore.

    Chief Financial Officer, FBNInsurance, Festus Izevbizua while speaking  at the Old Peoples’ Home said the visit was one of the many ways the company shows how much it values the society in which it conducts business.

    He said they are committed to ensuring that the society  is well taken care of.

    He also said that every year, during the Yuletide period, they pay visits to the less privileged to appreciate them and ‘’demonstrate our belief that the society is the bedrock of every business,” he said.

    FBNInsurance Limited is ranked fifth in the Life Insurance business with a healthy premium income of N7.1 billion and an operating profit of well over a billion naira while her return on equity was 22 per cent in 2014. The company also acquired Oasis Insurance, which has since been re-christened FBNGeneral Insurance.

  • AIG attempts balancing act to weather storm

    American International Group Inc. will have to balance shareholder demands for profit and client desires for more product innovation to emerge successfully from its current woes.

    The New York-based insurer said four key executives which include Commercial Insurance CEO John Doyle, Chief Financial Officer David Herzog, CEO of the Asia Pacific Region Jose Hernandez and Executive Vice President of Claims and Operations Eric Martinez would leave.

    The December announcement came just weeks after AIG posted a third-quarter loss of $231 million. In an earnings call after releasing its results, President and CEO Peter Hancock said AIG planned to cut 23 per cent of its 1,400 senior management positions, with further layoffs likely in 2016.

    The cost-cutting moves followed repeated calls by investor Carl Icahn that AIG be split into three separate entities like property and casualty, life and mortgage to enhance shareholder value and allow it to get rid of its federally imposed systemically important financial institution designation.

    Although Mr. Hancock met with Mr. Icahn, no divestiture plan was announced.

    However, AIG subsequently said it would sell some of its stake in Chinese insurer PICC Property & Casualty Co. Ltd. in a deal worth nearly $752 million.

    The cost-cutting moves have raised questions among some risk managers and others whether AIG is backing away from its tradition of innovative products and services. In fact, some say the company already has softened its focus on innovation.

    “You just haven’t seen the innovation you used to see,” said a risk manager who asked not to be named. “It’s been very subtle. I would agree that they are not emphasising new products. AIG is clearly in a defensive hunkered-down mode,” a broker who asked not to be named said. “People are scared for their jobs; and when you spend that much time behind closed doors trying to protect yourself, it doesn’t leave a lot of time to be responsive to the brokers or creative in the marketplace.”

    “They’re reducing their management structure to make it more nimble and, from a risk manager’s perspective, that’s a good thing,” said another risk manager who asked not to be identified. “If there is more access to senior management, that’s a positive. If the consequence of that is almost a commoditisation of the product, they will be a less attractive option to the risk managers who deal with them because of a loss of their creativity in crafting unique solutions for large commercial insurance buyers.”

  • Ghana: National Pension Scheme transfers funds

    A total of GHS 193,116,008.95 has been transferred to Licensed Trustees administering mandatory 2nd Tier Occupational Pension Schemes by the National Pensions Regulatory Authority (NPRA), the Authority has said.

    The amount represents total funds transferred to Trustees in 2015.

    The authority began the transfers in November this year after applicants (Licensed Trustees) had successfully gone through validation of data and due diligence on compliance processes put in place by the authority.

    A statement issued by NPRA and copied to the Ghana News Agency in Accra, said so far, 12 Occupational Pension Schemes and 1,918 employers have benefited from the exercise.

    These beneficiaries include schemes and employers in the private sector as well as other state organisations.

    They include Enterprise Tier 2 Occupational Pension Scheme for 779 Employers, Metropolitan Master Occupational Pension Scheme for 369 Employers, Petra Advantage Pension Scheme for 336 Employers, Cedar Pension Scheme for 188 Employers, Pensions Alliance Trust Fund for 128 Employers and Secure Pensions Occupational Master Trust Scheme 112 Employers.

    The rest include ECG Tier 2 Pension Scheme for one Employer, GOIL Occupational Pension Scheme for one Employer, SSNIT Second Tier Occupational Pension Scheme for one Employer, Newmont Ghana Occupational Pension Scheme for one Employer Ecobank Ghana Limited Tier 2 Pension Fund for one Employer and GPHA Tier 2 Pension Scheme for one Employer.

    The statement said the Authority will resume the transfers after the Christmas and New Year break.

    In the first half of 2016, the Authority will also commence transfers to schemes in the public sector on the payroll of Controller and Accountant General’s Department, once such schemes have been duly registered by the Authority.

    Employers who have not registered their Mandatory 2ndTier Occupational Schemes are advised to comply with the ongoing compulsory enrollment, embarked upon by the Authority, in collaboration with Licensed Corporate Trustees in order to qualify to receive the TPFA Funds.

     

    Culled from GNA

  • IEI partners FRSC to promote road safety

    International Energy Insurance (IEI) Plc is  partnering with the Federal Road Safety Corps, in driving home the message of road safety during these ember months.

    This was made known in a statement made available to journalists in Lagos by the Head of Corporate Affairs, Tamuno Kiri.

    According to him, the IEI and FRSC partnership is to appeal to motorists to obey traffic rules and reduce overspreading that could lead  lead to road accidents which are avoidable.

    He said: “IEI in partnership with the Federal Road Safety Corps (FRSC), has begun the 2015 ember months special patrol with the theme: “driving safely into 2016’. The programe was designed to consolidate   the successes recorded in 2014. With the efforts of the Federal Road Safety Corps and other Government Agencies, there has been a drastic reduction in road crashes nationwide.

    “Reports state  that Nigeria loses three per cent of its annual GDP to road accidents. In 2014 alone, the country lost an equivalent of $10 billion to road traffic crashes, hence the need to champion the cause of road safety especially during these ember months.

    “Nigeria has the largest road network in West Africa and second largest in sub-Saharan Africa. It is reported that from 1960, to the third quarter of 2015, Nigeria has recorded 344, 367 road accident-related deaths with those of the deaths within productive age.”

  • N3.89tr funds: PenCom urges state governments to join CPS

    N3.89tr funds: PenCom urges state governments to join CPS

    The National Pension Commission has advised state governments that are yet to join the Contributory Pension Scheme (CPS) to do so to enable them benefit from the N3.89 trillion pension fund available for infrastructure and housing as at September this year.

    Its Director-General, Mrs. Chinelo Anohu-Amazu gave this advice while briefing the National Executive Council (NEC) at the Presidential Villa on the level of state government compliance with the scheme. In attendance were the 36 state governors of the federation  at the briefing chaired by Vice President, Prof Yemi Osinbajo.

    She however identified funding challenges, non-enactment of pension laws and resistance by state officials on consolidated salaries as major challenges and issues that must be dealt with to enable the states implement the CPS and comply with the Pension Reform Act (PRA) 2004 repealed by PRA 2014.

    She said other problem facing the states in the implementation of the CPS are the resistance by the organised labour due to low pension pay-out and absence of credible payroll.

    Anohu-Amazu who said the pension funds as at September stood at N5.103trillion noted that N3.899 trillion remains untapped potential available for infrastructure and housing.

    She listed process for accessing the funds for infrastructure as full implementation of the CPS and execution of Irrevocable Standing Payment Order (ISPO) to the Accountant-General of the Federation to deduct pension contributions and funding for accrued rights at source.

    She further said opportunities for states to join the CPS also include access to available RSA funds for infrastructure which she described as an efficient avenue for financing states’ long term borrowing needs such as corporate bonds.

    It also include access to RSA balances for affordable housing schemes by state employees, she added.

    She noted that pension assets totaling N160 billion have so far been invested in state bonds towards infrastructure development.

    She called on states to take steps towards full implementation of the CPS.

    She said: “States should begin to take steps towards full implementation which include urgent enactment of State Pension Laws, establishment of State Pension Bureux to drive implementation of the CPS; commencement of actuarial valuation to determine accrued rights of employees; opening of RSA for eligible employees and issuance of retirement benefit bonds to eligible employees.

    “Others are opening of Retirement Benefit Bond Redemption Fund Account (RBBRFA) with either the Central Bank of Nigeria (CBN) or a Pension Fund Custodian (PFC); adequate funding of the RBBRFA; consistent remittance of both employer and employee pension contributions; deployment of robust ICT to facilitate implementation efforts and institution of Group Life Insurance for employees.”

    She enjoined the states to comply fully with the scheme stating that the Commission would continue to collaborate with them to achieve full implementation.

    Speaking on safeguards of the CPS, she said it entails meticulous investment limits and risk rating, segregation of pension funds from assets of operators, daily, monitoring of investment of pension funds, guarantee from the parent company of PFCs and mandatory statutory reserve requirements for PFAs.

     

  • Premium Pension gets ISO-27001:2013 certification

    Premium Pension gets ISO-27001:2013 certification

    Premium Pension Limited (PPL) has achieved ISO 27001:2013 (Information Security Management System) in its bid to further enhance the confidence of its Retirement Savings Account holders, retirees, regulators and other stakeholders in its operations.

    The company’s ISO 27001:2013 certificate presentation ceremony held in Abuja was witnessed by the National Pension Commission (PenCom) along with British High Commission and other pension operators places the company to be the first Pension Fund Administrator (PFA) in the country to be certified.

    PenCom Director-General, Mrs. Chinelo Anohu-Amazu, represented by its Commissioner Inspectorate, Prof Mohammed Kaoje Abubakar said the ISO certification is well deserved following positive contributions of the company to the Contributory Pension Scheme (CPS) in the past 11 years.

    Abubakar said the Commission has been able to move the pension industry from a pension deficit to about N5.1 trillion following the introduction of CPS in 2004.

    He however congratulated Premium Pension on its ISO certification noting that the company has been an active player in realising the huge growth in the industry.

    He said: “The CPS came into force with the establishment of the Pension Reform Act 2004. Before then, the industry was bedeviled with many problems but I want to state categorically that since the advent of the CPS, the industry has been growing and we are able to move out of pension deficit to about N5.1 trillion pension fund under management.

    “Premium Pension has been an active player and they should also share in this credit. One of the achievement of CPS is that pensioners get their benefit as and when due.

    “Most importantly, since the advent of CPS, we as regulator and operator have not been found wanting. In this kind of fiduciary responsibility that we ought to discharge. There has been no sharp practices and I think all of us will take credit for this. The ward is well deserved and PenCom is very proud of Premium Pension”, she said.

    In a welcome remark, Chairman, Premium Pension, Aliyu Dikko stated that the achievement of the ISO 27001: 2013 certification is a visible proof of the company’s commitment to meet internationally accepted data security standards.

    According to him, the certification means to the company is to demonstrate that it has placed information security as a priority, while reassuring stakeholders that a best practice security system is in place with a strong compliance with PenCom IT standards.

    Managing Director, Premium Pension, Wilson Ideva said the company has N382 billion pension fund under its management and has paid a total of N93,4 billion to retirees since 2005.

    He explained that the certification is a self-imposed duty by the company in ensuring that its information security management system meets with the expectation of its stakeholders  especially its highly valued RSA holders and legacy Pension Funds owners that have entrusted their funds to the management.

    He added that by this certification further demonstrate the company’s zeal in ensuring the safety of legacy funds.

    For our board and management, the certification is another indication of First and a measure of its strong corporate governance anchored on global best practices, he said.

  • Lagos pays employees over N100b pension rights

    Lagos pays employees over N100b pension rights

    • Prepares would-be retirees for retirement

    Lagos State government has funded its employees’ pension rights to over N100 billion.

    A breakdown of this figure shows that out of this amount, a total monthly pension contribution of N59.82 billion has been remitted and credited into active employees Retirement Savings Account (RSA) managed by 10 Pension Funds Administrators (PFAs) from April, 2007 till date.

    Between this period, a total number of 9, 014 retirees, accrued pension rights of N41.58 billion has been paid by the state government.

    The state government however took time to sensitise and prepare its would-be employees on retirement.

    Director-General, Lagos State Pension Board (LASPEB), Mrs. Folashade Onanuga who spoke at the Board’s 9th Pre-Retirement Seminar for Core Civil Servants, SUBEB, Parastatals and Local Government Employees due to retire between January to June 2016  in Lagos, said the seminar which holds bi-annually is intended to prepare employees who would be retiring soon for a life of financial independence.

    She also said the state is aware that many regular salaried employees are apprehensive of what the future holds for them when they are out of office, more so with the present harsh economic.

    She stressed that the government has resolved to prepare the minds of its retirees that retirement is inevitable and should be looked forward to. She noted that a retiree would be happy to retire if he is well informed of arrangement made by his or her employer for end of service benefits.

    She stated that as at the moment, the state does not owe any employee monthly contributions that will be remitted into their RSAs.

    She said: “Since the release of N11 billion by Governor Akinwunmi Ambode in July 2015 for payment of accrued pension rights of pensioners who had been on the waiting list, they have been paying accrued pensions monthly.

    “Similarly, from August to October, 2015, accrued pension rights of N6.8 billion have been paid into the RSAs of 1, 754 retirees while we are ready to pay another set of N1.6 billion for November 2015.

    “The state is committed to ensuring that all accrued pension rights being employees’ entitlement for years spent in service before the commencement of the Contributory Pension Scheme like their entitlement under the Pay As You Go scheme, are credited into their RSAs.”

    Onanuga also said the payment of the accrued pension rights is critical to early processing of employees terminal benefits by their PFAs hence the state’s resolve to educate them on early documentation requirements.

    According to her, the state government’s accrued pension rights obligation is huge but it is determined to give employees comfort.

    “Our motto is ‘where there is a will, there is a way’. The government is aware that the funding rate as indicated in then law is extremely low and hence we continue to go the extra mile by ensuring that additional funds are provided to meet pensioner’s needs.

    “LASPEB will not rest on its oars until we get to the point where before a retiree exits, his accrued pension would have been credited into his or her RSA.”

    Also speaking on the occasion, Commissioner for Establishments, Training and Pensions, Dr. Benson Akintola said the state government is also committed to ensuring that people who retire from service live a life of financial independence.

    He said the fact that the state government has paid accrued pension rights of over N41 billion speaks volume of the premium it pays on its ex-employees.

    “Furthermore, the state pays prompt attention to the obligatory regular monthly deductions of 7.5 per cent from the salary of each officer and corresponding 7.5 per cent by the state government and these contributions are remitted into individual RSA maintained by you with your appointed PFA. This trend will be sustained.

    “We know the liabilities are huge but our government remains committed to your welfare. This assurance is what I want you to take away for today’s meeting,” he added.