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Tag: PenCom

  • Reps probe of PenCom worries stakeholders

    The decision by the House of Representatives to probe the activities of the National Pension Commission since April 2017 till date appears to have brought about calmness in the pension industry.

    There have been worries, however, by Industry stakeholders on the nature of the information that the probe may provide to the public.

    While some of them see nothing wrong in a probe, they are worried that sensitive and confidential information on the industry would be exposed to the public, stressing that the move may harm rather than help the industry and cause unnecessary anxiety by pension contributors in Nigeria.

    An ad-hoc committee of the House of Representatives mandated to probe activities of the National Pension Commission (PenCOM) since April 2017 has sent tongues wagging on the exact motives and end game of the investigation.

    The Committee headed by Hon. E.J. Agbonayinma, had in a letter to the Acting Director General of PenCom, Aisha Umar, dated January 21, requested confidential information on the Contributory Pension Fund, leading to speculation in the industry on why legislators would request information that breaches the law.

    In the letter titled: Request for Information the Committee asked PenCom to furnish it with sensitive information on its operations as well as the status of pension contributions in Retirement Savings Accounts, contrary to the provisions of the Pension Reform Act (PRA) 2014 which forbids the Commission and members of the Commission from disclosing such information.

    Among the information requested by the legislative committee are “The Net Asset Values of the Contributory Pension Funds, details of supervision and regulations of Pension Fund Administrators and their key instructions and performances, compliances and defaults, annual pension operations of all the Pension Fund Administrators (such as details of amount collected from contributors and amount being paid out to retirees, from April 2017 till date).”

    The Committee also requested for details of investment percentages and profits from the investment of pension funds, and details of the Federal Government contributions to the Federal Government bonds.

    It also asked for the “contributions of retirement savings account holders to Pension Funds Administrators and details of payments from PenCom into the Treasury Single Accounts (TSA) and bank accounts details operated by the Commission” It also requested the PenCom to respond to the request urgently.

    Many industry stakeholdrs who spoke to reporters off-the-record on the planned investigation of PenCom by the House wondered why the lawmakers would ask the Commission to breach the pension law by divulging sensitive and confidential information about contributions of retirement savings account holders.

    “Some of us are ready to sue PenCom if this confidential information is given out because it is an infringement on the right of the account holders as well as the business strategies of respective operator companies”, a source said. The source also hinted that the House of Reps probe is capable of causing ripples in the financial industry in Nigeria due to the huge amount of investments by pension funds in various sectors of the economy.

    Meanwhile, there are no proofs whether PenCom intends to provide the information requested to the Committee or not. But a member of the Committee contacted said the Commission was yet to respond to their request.

     

  • Pencom to launch micro pension

    All is set for the launch of Micro Pension Scheme by the National Pension Commission (PenCom) this month.

    The planned micro pension is expected to attract over 20 million workers and N3 trillion into the pension assets.

    With total pension assets as at October, 2018 at N8.45 trillion, the country’s pension assets are expected to rise to over N11 trillion with the micro pension plan.

    Investigation revealed that the pension industry regulator, PenCom has put all mercenaries in place to ensure smooth launch of the plan.

    To ensure seamless operations, PenCom, together with pension fund operators have built robust Information Technology (IT) infrastructure that will support the plan.

    In preparation for the take-off of the schame, the commission said it has also had engagements with informal sector groups, such as, the Nigerian Union of Textile, Garment and Tailoring Workers of Nigerian (NUTGTWN), a body consisting Self- Employed Tailors and Garment Workers; partner trade associations, Non Governmental Organisation (NGOs) and religious bodies.

    PenCom Acting Director-General, Mrs Aisha Dahir-Umar, at a pension forum in Lagos, said the implementation of micro pension will improve the standard of living of the informal sector participants at retirement and reduce dependence on extended family for support at retirement.

    The scheme, when operational, she said would capture self-employed people, especially those with irregular income, usually in the informal sector are largely financially uninformed with limited or no access to financial services especially pension plan.

    Section 2(3) of the Pension Reform Act, 2014 legal framework extends the coverage of the Contributory Pension Scheme (CPS) to self-employed persons through micro pension scheme.

    The Head, Research & Corporate Strategy, PenCom, Dr. Farouk Aminu, added that the commission is working on ensuring that the plan commence as planned, noting that this is a development that could enhance the growth of pension assets in the country.

    He stressed that the plan has the potential to generate about N3 trillion to the pension assets, while it intends to mobilise about 12 million contributors within five years.

    On benefits to be derived, Dr. Aminu noted that self-employed people and workers in the informal sector could reap by participating in the plan, saying in addition to providing income for them at old age and inculcating a savings culture through highly protected and regulated investment. The plan would afford them the opportunity to connect to other programmes of government while helping to finance infrastructure across the country.

    He said: “The self-employed can as well use the balance in their Retirement Savings Accounts (RSAs) as equity contribution for residential mortgages and support their businesses and benefit from other micro-credit schemes and special awareness programme affiliated to the scheme, he said.

    “The additional benefits to self-employed persons and informal sector workers include the cover provided under the Pension Protection Fund (PPF). Under this arrangement, government would bridge shortfalls or financial losses from investment of their accumulated retirement savings and guarantee them minimum pension in retirement, irrespective of how much they are able to save before retiring. The plan will be funded by an annual subvention of one per cent of monthly wage of Federal Government employees, annual levy on PenCom and pension operators as well as pension fund investment income.”

    The Head of Corporate Communications, PenCom, Mr. Peter Aghahowa, also added that the scheme is made flexible for people to easily join, while the method of contribution is decided by the contributors, who are to choose whether to contribute daily, weekly, monthly, quarterly, and so on.

     

     

  • PENCOM issues compliance certificates to 10,120 firms

    The National Pension Commission (PenCom) has issued compliance certificates to 10,120 pension compliant firms in 2016.

    The was made known in a report entitled: “Issuance of compliance certificates”, by the commission.

    PENCOM said 301 applications were declined due to non-remittance of pension contributions.

    During the year under review, the Commission said it received a total of 10,421 applications for issuance of compliance certificate.

    The report showed that of these applications, compliance certificates were issued to 10,120 organisations and 301 were declined due to non-remittance of pension contributions for the appropriate period or non-provision of Group Life Insurance Policy for the employees.

    Similarly, the commission’s Benefits and Insurance Department reviewed and processed the requests for approvals to access the RSA balances of retirement/terminal benefits, death benefits, access to RSA on health grounds, payment to foreign nationals as well as employees who disengaged before attaining 50, and other entitlements submitted by the Pension Fund Administrators (PFAs) on behalf of retirees and/or contributors.

    It supervised all issues relating to Group Life Insurance Policy and retirements on Life Annuity.

    The report read: “The department has, developed the Framework and Guidelines for the implementation of the Pension Protection Fund (PPF) and Minimum Pension Guarantee (MPG) as provided under Section 82 & 84 of the PRA 2014, as amended.

    “These guidelines are undergoing the requisite processes and subsequent issuance.

    “However, all stakeholders have been notified to make provisions in the 2017 budget for the funding of the PPF during the year preparatory to implementation.”

     

  • Reform deepens financial market, says PenCom

    The introduction of diversified investment portfolio, the Multi-Fund Structure, by the National Pension Commission (PenCom), has increased the influx of pension funds into allowable investment instruments hosted by the capital market, Acting Director-General, Mrs Aisha Dahir-Umar, has said.

    The Muti Fund Structure introduced by the Commission on June 2, 2018, she said, is causing the capital market to assume more depth and liquidity.

    Mrs Dahir-Umar, who spoke at the 2018 Peninscope Annual Public Lecture in Lagos on the ‘Role of Pension in the Economy’, disclosed that pension funds and assets stand at N8.3 trillion, accounting for about five per cent of Nigeria’s Gross Domestic Product (GDP).

    She said there is a significant relationship between pension funds investment and the performance of the capital market in Nigeria since the 2004 Pension reform.

    Aside, she said the pension reform, which established the Contributory Pension Scheme (CPS), has provided jobs and employment opportunities for thousands of Nigerians, with the emergence of 21 Pension Fund Administrators (PFAs), four Pension Fund Custodian (PFCs), seven Closed Pension Fund Administrators (CPFAs) and Licensed Life Insurance firms.

    In the same vein, the Acting DG said the stimulation of Real Estate Development to Retirement Savings Account (RSA) Balance for equity contribution towards residential mortgage allows PFAs to apply 25 per cent of the RSA balance towards payment of equity contribution for  mortgage by a RSA holder. This, she noted, is in line with Section 89 (2), subject to guideline issued by PenCom.

    She said: “The pension reform has also helped in the provision of economic stability through incremental effect on Nigeria’s GDP. Pension funds and asset currently stand at N8.3 trillion, accounting for about five per cent of Nigeria’s GDP. The Commission has deployed measures to increase the pension funds to GDP ratio from five per cent to 10 per cent through the implementation of an expanded coverage strategy via the Micro Pension Plan to bring on board the informal sector by January 2019.

    “The introduction of the micro pension plan would assist the Commission to achieve the objective of ensuring at least, 20 million contributors by the end of 2019. PenCom, in accordance with the Provisions of Section 2(3) of the Pension Reform Act (PRA) 2014, is set to include the self-employed and persons working in organisations with less than three employees under micro pension. Micro Pension aims at ensuring that the informal sector participants save towards their old age. As this category of workers constitute a large percentage of the working population in the country, it is expected that micro pension would expand the coverage of pension contributors by an estimated 30 million people by 2024.

    “To implement this initiative, the Commission segmented the informal sector into three broad categories, namely: the low-income earners, the small & medium scale enterprises (SMEs), and the high-income earners. Each of these categories will be targeted with appropriate pension products and sensitisation programmes that suit their various peculiarities. Due to the peculiarities of the informal sector, micro pension would be flexible, safe, convenient and simple.

    Speaking on benefits of micro pension, she said over time, old age poverty will decrease with its introduction because the informal sector worker would have saved for retirement while active.

    “The additional savings from micro pension would aid economic development and macro-economic stability through investment in infrastructure and financial markets. Contributions will be transferred to designated beneficiaries in the event of a Contributor’s death.”

    Speaking on the challenges, she said despite the benefits of micro pension, there are a few envisaged challenges that need to be addressed, which include financial illiteracy and low income.

    “Some of the low-income earners, who constitute the third segment of the informal sector are mostly illiterate and inexperienced with formal financial transactions and institutions. This category of people must be educated on the importance/benefits of personal finance before they can be convinced to sign up for Micro Pension.

    “Unlike the high-income earners, who can deposit in lump sum, most low-income earners are daily wage workers and as such are unable to deposit large amount at a go. Therefore, Micro Pension requires specific characteristics in design and distribution to make the product affordable for low income earners. Low income earners need to be educated on how small amount of money can be saved individually and invested collectively to grow benefits.

    On the way forward, she said the Commission expects that the implementation of Micro Pension will yield positive results for Nigerians and the Nigerian pension industry.

     

    “The Commission has recently issued the guidelines and framework on micro pension. In addition, the Commission is working on the IT infrastructure that will support its launch. With the implementation, people under the informal sector can save in an account and receive the benefits when money is invested and protected under legislation instead of putting money under their matrasses.

    “In the absence of any other form of social security in Nigeria and in the light of shifting demography in favour of the retired or aged population, pension provides income security to the retired worker or his beneficiary in the event of death (Death Benefits). Pension as a steady stream of income provides the retiree with purchasing power that reduces the employed to unemployed dependency ratio”, she added.

  • PenCom to workers, retirees: provide NINs, BVN to PFAs

    The National Pension Commission (PenCom) has advised all Retirement Savings Account (RSA) holders and retirees to approach their Pension Fund Administrators (PFAs) to provide their National Idnetity Nimbers (NINs) and Bank Verification Numbers (BVNs), as well and other mandatory biodata information.

    This is in line with Federal Government’s directive that madates every Nigerian to have a NIN.

    Acting Director-General, PenCom, Mrs. Aisha Dahir-Umar gave the firective in a statement yesterday.

    “The Federal Government has made it mandatory that every Nigerian must have a NIN. To achieve this, all data generating organisations have been directed to harmonise their databases with the National Identity Management Commission (NIMC), which has the mandate to implement the National Identity System in Nigeria.

    “To enable the pension industry comply, PenCom has directed all PFAs to update the records of their clients. Consequently, all RSA holders, both active and retired, are hereby advised to approach their PFAs to provide their NINs and BVNs, as well as other mandatory biodata information,” the statement read.

  • Contributory Pension Scheme is fraud-free, says Pencom

    The National Pension Commission (PenCOM) has assured employers and contributors of the safety of their funds under the Contributory Pension Scheme (CPS).

    Pencom’s Head of  State Operations Dan Ndackson spoke at a consultative forum for states and local governments in Port Harcourt, Rivers State capital.

    Ndackson said: “Under the contributory pension scheme,  fraud is reduced to the barest minimum,that is why we make bold to say, the new scheme is fraud-free to a large extent. If states continue with the old scheme, the issue if pension fraud will continue to arise, this is because, it has so many loose ends that people exploit and commit fraud.

    ”That cashier, that officer that used to steal under the old scheme, where will he see the money to still, the money is remitted into peoples’ accounts.

    “We normally advise employers to ensure necessary measures are put up by their organisations to discourage the drive to commit fraud.

    “The scheme is self- insured, the way the scheme is structured,  it is very difficult for a fraud to be perpetrated under the scheme.  This is because the people who manage the funds have no access to the funds, those who keep custody of the fund assets do no relate with anybody and the contributors have record of everything that is credited into their accounts.

    “By this, it is not possible for anybody to tamper with the money, as in the secular bank accounts,  if anybody notices unexplained reduction in his,  her bank account is at liberty to query the bank,  so much so it is with this account,  in the same way,  nobody has ever come up to allege that finds were withdrawn from the accounts since the commencement of this scheme,” he said.

    He confirmed that most states were yet to sign up  for the scheme.

    “Which naturally means that it goes with non- payment of gratuity,  death benefits, and we are also aware that most of this state still do not pay pension to their retirees, and even those that are managing to pay,  settlement of gratuity still remains a challenge.

    “PenCOM is helpless with states because the constitution gives them the powers to design their pension systems, we only assist states as required,  we cannot impose a particular pension scheme to states, because of this,  we can only appeal to them to do something on this area,  and the matter is worsen because of the fact that most states are yet to accept the CPS system.”

  • Pensioners hail Buhari

    *Describes his administration as best in 14 years of contributory pension scheme

     

    Some retirees, under the aegis of Nigeria Union of Pensioners, Contributory Pension Scheme Sector (NUPCPS), have written to President Muhammadu Buhari, applauding his administration as the best they have seen in 14 years of the pension scheme.

    In a letter dated December 10, 2018, signed by the Chairman of the union, Comrade Sylva C. Nwaiwu, the pensioners said they were registering their “unanimous acknowledgement and commendation of the good performance” of the administration in the Contributory Pension Scheme sector in particular, and Nigerian Pension Industry in general.

    A statement by the Special Adviser on Media and publicity, Femi Adesina, said that the union disclosed that the consensus was reached during the union’s 3rd Post-inaugural Congress/Interactive Session with the National Pension Commission (PENCOM) held last month in Maitama, Abuja.

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    Distancing itself from partisan politicking, NUPCPS said the union was made of “elder statesmen and women who must stand for the truth, no matter whose ox is gored,” adding: “We owe no one any apology for expressing the truth we know about the good works of your administration.”

    The union said further: “Your administration inherited huge pension liabilities as a result of the excesses and recklessness of the previous administration which mismanaged pension funds meant for the payment of retirement benefits…Nevertheless, your contribution in just few years in office is one of the best we have seen in the 14 years of the existence of the Contributory Pension Scheme (CPS) in our nation.

    “Your insight, determination, political will and commitment as demonstrated in the release of bailout funds to ameliorate the sufferings of Nigerian workers/pensioners is unequalled and highly appreciated by the union and other stakeholders.”

    The union also urged President Buhari to “complete the good work you have started” by authorizing additional bailout to clear the outstanding backlog from last year.

  • PenCom sanctioning PFAs on infractions

    The National Pension Commission (PenCom) has noticed  with dismay that some Pension Fund Administrators (PFAs) delay in the payment of retirement benefits to the retirees and do not credit pension contributions appropriately in the Second Quarter of 2018.

    Other major challenge observed from the review of the quarter include corporate governance issues.

    To this end, the Commission said it is sanctioning erring companies in its bid to ensure strict regulation and supervision of the pension industry, stating that the Commission has a document titled ‘Regime of Sanction’ which is applied to every infraction made by any company.

    According to the Commission, the issues in some of the companies were found after monthly routine examinations carried out by PenCom on the 19 PFAs, 7 Closed Pension Fund Custodian (CPFCs) and 4 Pension Fund Custodian (PFCs).

    In the Commission’s Second Quarter 2018 Report on regulatory and supervisory activities, another major issue observed from the review of the compliance reports forwarded by the operators include outstanding commitments from previous routine examination.

    The report stated that the issues identified formed part of the target areas for the target examination of operators to ensure compliance.

    During the quarter under review, the commission carried out a target examination on UNICO CPFA Limited to determine the final state of operations of the company before winding up.

    The commission has also issued Draft Reports for the 2017 routine examinations to 15 licensed pension fund operators.

    The report further showed final reports for the 2017 routine examinations were issued to Fidelity Pension Managers Limited and AIICO Pension Managers Limited.

    The commission stated that it began the 2018 routine examinations on 16 April, 2018 on Apt Pensions Limited, Fidelity Pension Managers Limited, Sigma Pensions Limited, NPF Pensions Limited, Premium Pensions Limited and IEI Anchor Pension Managers Limited.

    The report read: “The Commission continued its consultative philosophy in the regulation and supervision of the industry. The risk-based examination approach was implemented as a way of promoting transparency and providing early warning signals as well as encouraging pension operators to regularly self-evaluate their positions.

    On Corporate Governance, during the quarter under review, 27 out of the 31 operators forwarded their Corporate Governance reports for the year ended 31 December, 2017.

    “The major issues observed from the review of corporate governance reports forwarded by operators include inadequate size of boards; non-submission of annual performance evaluation of Directors; Executive Directors included as members of the Board Audit Committees; and some directors served as members of all Board Committees.”

    While giving update on Returns Rendition System, the Commission said 30 licensed pension operators comprising of 19 PFAs, 4 PFCs and 7 CPFAs rendered the returns for the pension funds under their management or custody as well as their companies’ accounts to the Commission via the Risk Management and Analysis System (RMAS) for June, 2018.

    The Commission stated the resolution on the activities of the operators thus:“The regulatory intervention on First Guarantee Pension Limited (FGPL) was ongoing and the Interim Management Committee of the PFA was reconstituted with effect from 03 April, 2018. Appointments were made for the positions of Chairman, Managing Director (MD), Executive Director (ED), Business Development & Operations and Executive Director (ED), Finance and Investment.

    “The Commission continued to apply various strategies to ensure compliance with the provisions of the Pension Reform Act (PRA) 2014. This included the application of sanctions and collaboration with key stakeholders on public enlightenment campaigns as well as engagement of defaulting employers through pension recovery agents engaged by the Commission to recover unremitted pension contributions.

    Head, Corporate Communications, PenCom, Peter Aghahowa in an interview with The Nation said that the Commission is very serious with its surveillance and routine examinations of the industry.

    He explained that operators are mandated to submit compliance reports to the Commission every month, noting that the Commission further carries out routine check every year on the operators.

    “When we carry out inspections on the companies and discover arears or issues that are not right, we ask them to do some things and they will be giving us information on how they are complying with the things we have lined out for them.

    “We started the routine check for 2018 in April. We are dealing with companies that fail to delay pension payment. Although some companies have tenable reasons for delaying payment, others do not  and we deal with them accordingly.

    “We have a document called ‘Regime of Sanction’. The companies are fully aware of the fines and penalties that await them should they fail in their responsibility. In fact, some of them say the Commission is too hard on them but others realise we cannot afford to do anything less bearing in mind the sensitivity and peculiarity of the industry”, he added.

     

  • Reps to probe PENCOM over alleged illegalities

    •House urges Buhari to send list of board members

    THE House of Representatives yesterday resolved to investigate the activities of the National Pension Commission (PENCOM) from April 2017 to date over alleged illegalities.

    It has, therefore, set up an ad-hoc committee to conduct the investigation and report back to the House within four weeks.

    The lawmakers also urged the Federal Government to abide by the constitution and the PenCOM Act by submitting the constituted PenCOM Board to the Senate for confirmation within seven days.

    The recommendations of the House followed the passage of a motion by a member, Benjamin Waya (APC Benue).

    The lawmaker brought the motion, titled: “Motion to investigate the violation of PENCOM Act,  illegal and unlawful appointments,  and provisions and use of public funds,”  under matters of urgent national importance.

    Wayo, while moving the motion, said: “In April 2017, the Federal Government of Nigeria announced the constitution or composition of the Board of the National Pension Commission (PENCOM), made up of Chairman,  Director General and four members as executive commissioners respectively. ”

    He said 19 months since the announcement of the composition of the board , members are yet to assume office.

    “As a statutory agency,  the appointment or the board members is made subject to the confirmation of the Senate,  upon the request of the President to that effect, but which request has up till now not been made to the Senate by the President,” the lawmaker said.

    He said the Net Assets Value (NAV) of the contributory pension fund as at October  28, 2018 stands at N8.779 trillion with the number of contributors also grown to 8.90 million to date.

    Wayo expressed concern that in the absence of a proper structure put in place,  the lot of N8.779 trillion is left in the care of an acting director-general.

    The lawmaker alleged that a former PENCOM Director-General was once removed for misappropriation of funds in a single transaction to the tune of N1 billion.

    “The Acting Director-General, Mrs. Dahir Umar, has unilaterally without any backing of the law increased her terminal benefits and that of other senior staff of the commission by an outrageous 300 per cent.

    “And has also jacked up the number of PENCOM General Managers from 10 to 17, clearly in breach of extant laws governing the institution of PenCom,” he said.

    Wayo warned the House that it is dangerous and too risky to leave a treasury of N9 trillion without proper custodians and regulators”.

    But the leader of the House,  Femi Gbajabiamiila countered Wayo on the non-submission of the list of board members to the Senate.

    According to him,  it’s the Senate that has refused to confirm the list, adding that it’s not the fault of the President.

    When the Speaker,  Yakubu Dogara, called for a voice vote,  the resolutions were passed by majority of lawmakers in the chamber.

     

  • PENCOM appraises industry compliance, KYC, others

    The National Pension Commission (PENCOM) is strengthening its compliance and ethical culture and institutionalisation of Know Your Customer (KYC) processes in the pension industry, the Acting Director-General (DG) of the Commission, Mrs Aisha Dahir-Umar, has said.

    The Acting DG, who spoke at the Compliance Officers’ Forum at Le Meridien Ibom Hotel & Golf Resort Uyo, Akwa Ibom State capital, said the Commission was also reviewing the matters of identity theft in data capturing, emerging  risks and its mitigating factors, as well as other general industry operational issues.

    The forum, according to her, aimed at creating a platform in line with Section 80 of the Pension Reform Act (PRA), 2014 for compliance officers to regularly meet and share ideas on how best to optimally perform their functions and promote standards of excellence for compliance officers, thereby constructively impacting the industry.

    She noted that it is, therefore, imperative that compliance officers discharge their statutory roles with the required professionalism, independence and integrity.

    She said: “In an effort to promote a stable and sustainable pension industry, the Commission adopted zero tolerance for non-compliance and consultative supervisory philosophy in the issuance of guidelines and the review of existing ones to further promote sound corporate governance in the industry and ensure the security of the pension assets.

    “In addition, the Commission has, this year, moved to a more risk based approach to supervising pension operators by aligning its supervisory framework with that of the Financial Services Regulation Coordinating Committee (FSRCC).

    “We believe this will promote better risk management in licensed pension operators. It is also important to mention that the Commission recently released the framework and guidelines for the implementation of the Micro Pension Scheme, which is targeted at increased participation of employees in the informal sector, multi-fund structure and revised guideline for Fund Accounting as well as revised circular for branch opening and service centre by PFAs.

    “Similarly, circulars on pension enhancement and processing procedures of deceased benefits entitlement were also released by the Commission. The monitoring and reporting of non-compliance with regards to the implementation of these guidelines and other existing regulations remain part of the responsibilities of the Compliance Officers.”

    In a paper presentation on “Institutionalisation of KYC processes in the Nigerian Pension Industry”, by Chief Compliance Officer of Stanbic IBTC Pension Managers Limited, Edidion Akan,  the KYC principles under the Contributory Pension Scheme (CPS) have been incorporated in various guidelines issued by the Commission.

    He disclosed that this include Guidelines for the operations of Pension Fund Administrators (PFAs); registration of contributors/members; circular on client familiarity index; framework for micro pension plan; guidelines on voluntary contributions; working guide to PFAs on bio-data recapture; and guidelines for employer code requests by PFAs.

    He, however, said KYC requirements in these areas have been limited primarily to customer identification/information update, adding that threshold reporting requirements only commenced in January 2018 when introduced by the Circular on Voluntary Contributions.

    Stating reasons for KYC in the industry, he said so far, the Anti Money Laundering (AML) risk in the CPS has been largely mitigated by employer pre-registration requirement (employer code); defined contributions rates; defined source of contributions (monthly emolument) and; stringently regulated withdrawal of funds from the Retirement Savings Account (RSA).

    “The introduction of micro pension with allowance for contingent withdrawal by the informal sector provides opportunity to launder proceeds of criminal activity. Customer identification during onboarding, continuous account monitoring and reporting of suspicious transactions in addition to already existing threshold reporting is required.

    “The challenges are lack of a unique identifier for every individual in Nigeria to aid in the profiling of clients. The introduction of National Identification Number (NIN) addresses this and National Identity Management Commission (NIMC) should ramp up implementation across the country.

    “Also, Bank Verification Number (BVN) assists in mitigating this challenge. NIMC should be encouraged to consolidate all biometric databases in-country so that identity confirmation becomes effective and efficient.

    “Other challenges of KYC in the industry include too many guidelines/circulars touching on different aspects of KYC; lack of information and awareness concerning KYC within the Industry; Independence of the Pension Industry: closer collaboration with other financial sector regulators as well as investigative authorities is key and software for monitoring/reporting is not tailored to the CPS.”

    He recommended consolidating KYC requirements into one single regulation. “Other recommendations are; onboarding requirements should be clear and allow for categorisation of customers as envisaged under the MLPA and in consideration of financial inclusion; validation of customer identity documentation should be mandated. BVN, NIN, driver’s license, voters card have online verification portals.

    “There is need for identification of beneficial owners for employers should be introduced; account monitoring should be introduced to allow for suspicious transaction reporting in addition to threshold reporting; engage the Nigerian Financial Intelligence Unit (NFIU) to refine/agree pension industry reporting templates; operators to commence KYC/AML training for all members of staff, especially Business Development/client facing staff,”  he added.