The Nation Newspaper

Tag: PenCom

  • PENCOM still in charge of N3.4 tr fund, says FG

    The Federal Ministry of Finance has clarified the planned investment of the N3.4 trillion pension funds in infrastructure.

    Spokesman for the Ministry Paul Nwabuikwu stated that “the idea which is still in the preliminary stages is to help National Pension Commission (PENCOM) explore profitable opportunities in infrastructural investment.”

    The Nigeria Sovereign Investment Authority (NSIA) he said “has the expertise to advise the PENCOM on the best ways to invest safely and profitably in investment grade opportunities” but PENCOM will still be I charge of the funds.

    Nwabuikwu added that “all over the world pension funds boost their funds by investing in infrastructure because both pension and infrastructure are long term funds.”

    The decision to involve the NSIA he said is still a preliminary discussion and more information will be made public “when there is some concrete progress.”

    Pension funds the ministry of finance said are delicate and the focus of the government is to ensure at all times that they are handled with utmost safety in mind at all times.”

    Last Thursday, the Minister of finance Dr. Ngozi Okonjo-Iweala had stressed that; “one of the benefits we have from having the Sovereign Wealth Fund (SWF) is not in the plethora of organisations that want to co-invest but that they will also help us work along with our pension funds. In other countries their pension funds invest in infrastructure and other things but how to do it to make sure that they are protected.”

  • Presidency mulls new DG for PENCOM

    Presidency mulls new DG for PENCOM

    • ‘N3.4 tr pension fund threatened’

    The Presidency is weighing the option of appointing a new Director-General for the National Pension Commission (PENCOM), The Nation has learnt

    A source disclosed that the Presidency will soon announce a replacement for the acting Director-General, Mrs. ChineloAnohu-Amazu, saying the government was unconfortable wih the furore that greeted her appointment.

    Mrs. Anohu-Amazu still has some years to notch-up before she could assume the headship of PENCOM, which is worth N3.4 trillion in pension contributions.

    The source said the announcement of the substantive helmsman of PENCOM, would be made soon by the Presidency.

    It was gathered that some former commissioners of the commission are interested in returning, or becoming its Director-General.

    According to the Pension Reform Act 2004, the Director-General/CEO, must possess professional skills with not less than 20 years cognate experience in pension matters, and or nsurance, actuarial science, or other related fields.

    The source explained that although Mrs. Anohu-Amazu is fit, she does not have the legal experience.

    When The Nation contacted other pension fund administrators, they claimed that MrsAnohu-Amazu is yet to garner 20 years. They also raised the alarm that the management of the N3.4 trillion pension fund should be looked into.

    The threat to the pension fund, they said, is coming from what they call “the inadequacy of the investment windows”.

    One of the Pension Fund Administrators (PFAs), who asked not to be identified, told The Nation, that “with the N3.4 trillion fund of PENCOM, the inadequacy of the investment windows is obvious and require urgent review”.

    He added: “The fears of threat to pension funds stems from the dumping of much of the accummulated funds in banks and federal/state government bonds.”

    PFAs invest in some financial instruments approved by PENCOM, such as money/capital markets, bonds and mutual funds.

    Retirement Savings Account (RSA) holders expect good returns on investments from their accumulated contributions because their future retirement depends on it.

    An operator, who asked that his identity be veiled, decried the inability of thegovernment to appoint Board members to PENCOM, a situation, which has left the commission handicapped in applying the funds to other uses.

    According to the Pension Reform Act 2004, only the Board of PENCOM can take decisions on the management and investment of funds. F or months, the commission has been without a Board.

    The source said some regulatory challenges facing Pencom, have been ”agitating the minds of stakeholders and other watchers of the industry.”

    He listed some of them to include “the capability of Pencom as presently constituted to supervise the management of this large pool of funds; the calibre of people that government should appoint into the Board of PENCOM at this critical stage to achieve desired ends; and whether the PFAs have adequate expertise to handle investment decisions and fund management”.

    The government and the National Assembly, he said, need to take urgent remedial steps to respond to these challenges, so as “to address the fears being expressed by stakeholders over the health and safety of pension funds.”

    However, the source said it was gratifying, that the 2004 Act is being reviewed by the National Assembly.

    The pension experts have recommended that government should urgently reconstitute the board of pencom with finance and investment inclined individuals.

    Also, they are demanding that “due to the importance of this scheme and job to be don, political considerations should be down-played in the selection of these individuals, and the crop of staff at management levels in pencom with respect to qualification and experience should be appraised. Those not suitable should be replaced.”

    They said PFAs should be encouraged to seek experienced pension fund managers (local and foreign) for corroboration and partnerships while investment regulations should be loosed a little by admitting other investment options to help economic growth and development in Nigeria.

     

     

     

     

     

     

    Infrastructure financing from pension funds will be a step in the right direction.

    We need a more creative PENCOM and PFAs to utilize this surpulus

    funds for the benefit of contributors and the economy in general.

    The Commission shall consist of a part-time chairman who shall possess a university degree or its equivalence with not less than 20 years experience;  a Director-General shall be the Chief Executive Officer responsible for the day- to-day administration of the Commission; four full-time Commissioners who shall each possess professional and cognate experience in Finance and Investment, or Accounting or Pension Management or Actuarial Science or Business Administration or other related field and be fit and proper persons; and Part-time members of the Commission who shall be representatives each of, the Head of the Civil Service of the Federation, the Federal Ministry of Finance, the Nigeria Labour Congress, (iv) the Nigeria Union of Pensioners, the Nigeria Employers Consultative Association, (vi) the Central Bank of Nigeria ; and the Securities and Exchange Commission.

    Except for the par-time members of the commission others are out of office for now.

    Last week the Acting Director General of PenCom, Mrs. ChineloAnohu-Amazu hinted that the Commission was currently exploring the possibility of allowing contributors to utilize part of their Retirement Savings Accounts balances to part-finance the acquisition of low-cost houses.

     

  • Six states comply with Contributory Pension Scheme

    Six states comply with Contributory Pension Scheme

    Six states – Lagos, Ogun, Delta, Kaduna, Niger and Jigawa- have fully complied with the Contributory Pension Scheme (CPS).

    This means that they have maintained life insurance in favour of their employees for a minimum of three times their yearly total emolument as contained in section 9 (3) of the Pension Reform Act, 2004.

    While six other states have their own pension arrangements for their employees, 24 states are yet to have any pension arrangement for their workers.

    President of Pension Fund Operators Association of Nigeria (PENOP), Dave Uduanu, who made this known at a media parley in Lagos, said the National Pension Commission (PenCom) and the association are worried by this trend and have devised measures to enlighten the non-compliant states to key into the scheme.

    He, however, said operators were sensitive about the management of the fund.

    According to him, the scheme is young but growing, making its safety critical in meeting its key objectives, which is to ensure that workers (contributors) have access to their funds at retirement.

    Uduanu said this was why operators were wary of where to invest, despite pressures from all corners, that pension funds should be used to develop projects such as infrastructure.

    He said: “We have quite a lot of investment windows approved for us by our regulator, but still, we are buyers of securities, we are buyers of investment instruments and not a charity organisation that would repair roads and electricity.

    “If roads are to be built for tolls, or other liquid investments, where we are sure that retirees’ funds are safe we can be part of it.”

    Chief Executive officer, Stanbic IBTC Pension Managers Limited, Demola Sogunle, while speaking on regulation of the industry disabused the minds of many who continue to say that the industry is over regulated.

    He said: “We cannot be talking about over-regulation in a young industry that has to do with contributors’ emotions, an industry that is about retirees’ vulnerability.

    “It is important that the industry is properly established for safety of the funds.”

    He added that there would be guidelines from time to time, to define codes, ethics and conduct of the operators.

    Managing Director, Legacy Pension Managers Limited, Misbahu Yola, said the accounts of PFAs are International Financial Reporting Standard (IFRS) compliant in line with the deadline set by PenCom.

    He said: “On International Financial Reporting Standard (IFRS), the compliance deadline for all operators was December 31, 2012. A number of our results are already out, which are in compliance with the IFRS. We have all complied.”

    The Federal Government had informed operators in the economy that IFRS will be the new basis of financial reporting with effect from January last year.

    The adoption of IFRS would likely result in high quality, transparent and comparable financial statements based on internationally accepted modern accounting principles and concepts.

    IFRS are principles-based standards, interpretations and framework adopted by the International Accounting Standards Board (IASB). Its overall objective is to create a sound foundation for future accounting standards that are principles-based, internally consistent and internationally converged.

  • Consolidated supervision: Banks’ examiners for training

    Consolidated supervision: Banks’ examiners for training

    To actualise the objectives of consolidated supervision, the training of banks’ examiners will soon begin, the Nigeria Deposit Insurance Corporation (NDIC) has said.

    The training will be undertaken by the Financial Regulatory Service Sector Commission (FRSSC) comprising the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), National Insurance Commission (NAICOM) and National Pension Commission (PenCom).

    Director, Banking Supervision, NDIC, AdedapoAdeleke, told The Nation that the framework for the implementation of the scheme is in the pipeline.

    The regulators, he said, had agreed to come up with examiners who will be trained on how to implement the guidelines.

    He said the training of the examiners was crucial to the implementation of the guidelines on consolidated supervision, adding that each regulator would provide examiners to meet the needs of its sector.

    Adeleke said the CBN was at the vanguard of driving the initiative for its overall success. He said consolidated supervision would help in diagnosing sectoral problems, monitoring them, and providingcommon and proactive solutions.

    NDIC, he said, was working with the CBN to ensure proper supervision of the banks and also ensure that the industry’s problem does not spill over to other arms of the financial services’sector.

    He said: “We are working with other regulatory bodies to foster the growth of the consolidated supervision project.  We found out that there are banks that have subsidiaries that are not in the mainstream banking. This would hinder the supervision of the industry. Though no date has been fixed for the training of such examiner, all the regulators will have their own examiners.

    “Different areas in the financial service system require supervision. We have set up a consolidate supervision such that any bank, insurance company, stock broking firm, quoted companies, among others, that are exposed to risk would be quickly checked. The idea aimed at preventing crisis from snowballing in the financial system.”

    This is one of the ways of preventing a re-occurrence of the crisis that rocked the capital market and the banking industry in 2008. “Consolidated supervision would help in seeing, checking, and proffering solutions to problems in each sector.  Its framework would be executed by the examiners trained by the regulators,” he explained.

    Adeleke said the FRSSC would be able to intervene in any part of the financial services sector that is having problem, without going through the National Assembly for solutions. He said when this happens, the growth of the financial service sector and the economy would be fast-tracked.

    He said the commission would do a good job, stressing that it would not get involved in politics.

    On Savannah Bank, Adeleke said the NDIC does not have much role to play on re-opening the bank, arguing that CBN has the capacity to determine the fate of the bank.

    “With respect to the issue of Savannah Bank, NDIC cannot pay its depositors. CBN is still persuading the bank to pay the necessary fund before it can reopen for business,” he said.

     

  • PenCom begins verification, enrolment of Fed Govt’s retirees

    PenCom begins verification, enrolment of Fed Govt’s retirees

    The National Pension Commission (PenCom) has started a nationwide verification and enrolment exercise of all employees of Treasury Funded Ministries, Departments and Agencies (MDAs) of the Federal Government that are due to retire between January and December, 2014 for payment of their retirement benefits.

    PenCom spokesman, Emeka told The Nation that there were mistakes and complications in the process of getting necessary data of the contributors.

    This, according to him, necessitated early commencement of the verification exercise so that all loose ends would be tightened early enough.

    On why the transfer window for contributors to the scheme has not been thrown open for them to change non-performing Pension Fund Administrators (PFAs), in line with the Pension Reform Act 2004, he said it was due to data gathering problems.

    “The commission is aware that the transfer window is an important aspect of the Contributory Pension Scheme but there are a lot of complications.

    “There is the need to sort out issues that has to do with data. The commission is working hard to forestall the challenge of multiple registration which can mar the system if not properly done.

    “As a result, the commission does not want to continue with mistakes that has been discovered and has decided not to rush but ensure a genuine process of the transfer window,” he said.

    Onuoha said at the moment, some MDAs have different data base of their employees, but the commission does not intend to rely on them, adding that the National Data Department of PenCom had been working on how to get the best out of the situation and would come up with a solution soon.

    In line with the Pension Reform Act 2004, PenCom contributors under the new pension scheme who are dissatisfied with the services being rendered to them by their Pension Fund Administrators (PFAs) would have the opportunity to transfer their Retirement Savings Account (RSA) from one PFA to another.

    Section 11(2) of the Act provides that the employee may, not more than once in a year, transfer his RSA from one PFA to another without adducing any reason for such transfer. This provision is intended to facilitate pension assets portability in the pensions industry, and enhance healthy competition among the PFAs.

    It said notwithstanding, Section 11 (2) of the PRA 2004, the provisions of this regulation apply to a single transfer of RSAs in a calendar year, adding that subsequent review of the regulation would address multiple transfers of RSAs within a calendar year.

    PenCom noted that RSA transfers shall only be effected quarterly; namely first, second, third and fourth quarters, adding that, however, an RSA holder seeking subsequent transfer of his/her RSA shall be eligible for such transfer after 12 months.

    PenCom said failure by PFAs/PFCs to provide support to RSA holders shall attract a fine of N100,000 per RSA and N10,000 for every month of violation.

    Similarly, a monthly sanction of N100,000 per RSA shall be imposed on any PFA who violates the law.

    Onuoha further said PenCom has began a verification and enrolment of employees of Treasury Funded MDAs of the Federal Government who are to retire between January and December 2014 for the payment of their benefits.

     

  • PENCOM begins screening of 2014 retirees

    The National Pension Commission (PENCOM) said it will screen federal civil servants due to retire from January to December 2014 to facilitate easy payment of their entitlements.

    In a statement in Lagos on Monday, the commission said the exercise would take place at 14 centres nationwide from June 3 to July 11.

    The statement issued by PENCOM’s Head of Communication Unit, Mr. Emeka Onuora, said the exercise would be for those due to retire in 2014 by virtue of attaining 60 years or 35 years in service.

    It said that the exercise also covered those who had attained 65 years in service or 70 years of age for employees of tertiary institutions.

    “This physical enrolment also covers those who have already retired, but are yet to be enrolled.

    “Employees are requested to attend the exercise with original copies of letter of appointment, birth certificate/declaration of age, promotion letter and pay slip as at June, 30, 2004.

    “Other requirements include letter from the MDAs indicating retirement and first appointment date, grade level and step as at July 2007, past records of service and current pay slip,” the News Agency of Nigeria quoted PENCOM as saying in the statement.

    The statement said that employees should also come along with evidence of registration with a Pension Fund Administrator, indicating Personal Identification Number and one passport photograph.

    It said the commission required a Pension Desk Officer from an MDA to assist in identifying potential retirees and confirming the authenticity of the documents presented by employees.

    The statement said that medically unfit employees were exempted from the exercise.

    It added that the Pension Desk Officers should come with their documents and letters from qualified physician or medical board.

     

  • PENCOM to open zonal offices

    PENCOM to open zonal offices

    The National Pension Commission (PENCOM) is to open offices in all the zones in the country.

    The offices would be located in Calabar, Awka, Gombe, Kano and Ilorin.

    They would be empowered to carry out pension duties, which are only been done in Abuja.

     

  • PENCOM sanctions 1000 firms for failing to open retirement accounts

    The National Pension Commission (PenCom) has sanctioned about 1,105 organisations for failing to open Retirement Savings Account (RSA) for their employees.

    The Commission, according to a report, issued caution letters to 487 firms for failing to comply with the provisions of the law.

    In addition, it also imposed penalties on 618 erring firms during the period under review.

    PenCom said it had been following up the firms to ensure that the organisations complied with the Act.

    The Pension Operators Association of Nigeria (Penop) said recovery agents were appointed by PenCom to go after companies and organisations registered under the Contributory Pension Scheme, which had failed to remit employees’ contributions to their various Pension Fund Administrators.

    Its Chairman, Mr Dave Uduanu, said recovery agents have visited about 5,584 firms out of 15,750 firms identified as non-compliant with the law, and have so far made recoveries from 105 of these firms. He said PenCom had recently released an exposure draft of the framework for the participation of persons operating in the informal sector in the Contributory Pension Scheme (CPS).

    “Recovery Agents appointed by PenCom to go after companies and organisations that have failed to remit employee contributions to Pension Fund Administrators (PFAs) have achieved a lot of progress in recovery of outstanding contributions and interest penalties from defaulting employers.

    “The Recovery Agents have visited over 5,584 firms out of 15,750 firms identified as non-compliant with the law and the amounts so far recovered are from 105 of these firms”.

    On efforts so far made by PENCOM to bring in the informal sector into contributory pension scheme structure, Uduanu said the draft guidelines was exposed to operators for comments and was currently being finalised.

    Several additional incentives, he added, were being proposed to make the scheme more beneficial to persons working in the informal sector, who account for over 60 per cent of the working population in the country.

    The chairman said that the framework once released, would ensure the participation of persons working in the informal sector and effectively increase the coverage of the CPS.

    Uduanu also said PenCom would soon incorporate a multi-fund structure for RSA funds into the newly amended investment guidelines.

    He said PenCom had exposed the proposed multi-fund structure to operators for comments and review as far back as March last year.

    The decision to introduce the multi-fund structure, he noted, was to allow enough time for public education and sensitisation by the commission and also to allow operators enough time to be ready to implement the structure.

    Uduanu said: “The multi-fund will be primarily differentiated by its overall exposure to variable income instruments and a contributor’s choice of funds may be limited based on the age of the contributor.

    “Also, the multi-fund structure will also likely allow for the introduction of non-interest or ethical funds.”

     

  • PENCOM uncovers multiple registration by pension contributors

    PENCOM uncovers multiple registration by pension contributors

    The National Pension Commission (PENCOM) says it  uncovered some multiple registration of Retirement Savings Accounts (RSA) by some pension contributors.

    This is contained in a statement by its Corporate Affairs Manager, Mr Emeka Obiora, in Lagos on Saturday.

    It stated that the RSAs were opened with different Pension Fund Administrators (PFAs).

    According to the statement, in the course of planning for the new transfer windows, we discovered a single contributor with six RSAs in six PFAs, and we are sorting it out.

    “This development is wrong and in such situations the first PFA of choice is picked for the contributor.

    “This development is what is delaying the various transfer windows the commission is planning for contributors.

    “The transfer windows will provide the contributor different options to choose from, on how he wants his contributions to be invested and how to collect his money as a retiree,” it said.

    PENCOM said that it would not roll out the transfer windows without clearing the data as it would complicate issues.

    “At the heart of the transfer windows were biometrics and PENCOM will not have that in place with such problems,” it stated.

    It advised contributors that are having problems with their various PFAs to inform the commission about it instead of going to another PFA.

    The commission said it had dedicated a whole department to make the transfer windows possible.

    It added that work was ongoing and as soon as the data were cleaned up, the guidelines for the transfer windows would be issued.

    PENCOM said that the Risked Based Supervision (RBS) adopted did not give room for any contributor or PFA to engage in shady business.

     

  • PenCom okays 317 firms for govt’s contracts

    The National Pension Commission (PenCom) has okayed 317 private sector organisations. By this certification, the companies can bid for contracts with Federal Government Ministries, Depart-ments and Agencies (MDAs).

    This is by virtue of the certificate of compliance issued to these organisations by PenCom after having provided evidence of complying with provisions of the Pension Reform Act (2004).

    Compliance with the Pension Act, at minimum, include ensuring that all employees open Retirement Savings Accounts (RSAs) with Pension Fund Administrators of their choice; remitting both employer and employee pension contributions to the appropriate Pension Fund Custodian not later than seven days from the date of payment of salaries and transferring pension funds and assets prior to the commencement of the Pension Act to licensed pension operators.

    The Compliance Certificate replaces the erstwhile Letters of Compliance that were issued to organisations bidding or soliciting for contracts with Federal Government MDAs.

    PenCom had earlier brought it to the attention of all organisations and the public that any supplier, contractor or consultant bidding or soliciting contract or business from any MDA must fulfil all its obligations on pensions.

    PenCom has been updating the list of organisations that have been issued compliance certificates.

    The names of the affected companies are pasted on the commission’s website with PenCom noting that it has to be publicised to serve as a guide to Federal Government MDAs and for information of the public.