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Tag: PFAs

  • Reps probe non- remittance of contributions to PFAs

    Reps probe non- remittance of contributions to PFAs

    The House of Representatives yesterday mandated its Committee on Pensions to commence investigation into the allegations of non- remittance of contributions to the Pension Funds Administrators ( PFAs) by employers of labour in the country.

    The committee is also to obtain a comprehensive report on the operations of the scheme so far, including the list of defaulting employers and the amount involved and report to the House within six weeks for further legislative action.

    The resolution of the House was sequel to the adoption of a motion titled: Threat to the Continuation of the Contributory Pensions Scheme by non- remittance of Workers Contributions by Employers,” sponsored by a member, Joseph Edionwele.

    Moving the motion, the lawmaker said: “The Pension Reform Act of 2004 established a contributory pensions scheme for the payment of retirement benefits of employees in both the public service and the private sector to avoid the sufferings of retirees under the old scheme.

    “It is the responsibility of the employer to remit both the employers and employees contributions to the Pension Assets Custodian specified in Pension Fund Administrator (PFA) of the employee within seven days that the deduction is made from the salary of the employee.”

    However, the lawmaker noted that things are no longer working because “the pension scheme appears to have run into a headwind as the Pensions Act is observed more in the breach  by both the employers and the Pensions PFAs which necessitated the 2014 amendment stipulating stiffer sanctions.”

    Edionwele however expressed regret that billions of naira already deducted from the salaries of employees, are not remitted by employers.

    He said besides this, “There are many employers which are yet to open retirement savings accounts for their employees which may precipitate a debt crisis that could jeopardise the smooth and successful operation of the scheme, thus leading to even more suffering for Pensioners under the scheme.”

    When the Speaker, Hon. Yakubu Dogara called for a voice vote, all members supported its passage.

  • PenCom, PFAs, PFCs brainstorm

    THE National Pension Commission (PenCom), managers and custodian of the N5.15 trillion pension fund, have held a two-day pension retreat to deliberate on the way forward for the industry.

    PenCom Director-General, Mrs. Chinelo Anohu-Amazu, said the focus of the retreat tagged, “Nigerian 2015 Pension industry retreat” was the development of the implementation plan for the 2014-2024 strategy developed at the last retreat.

    According to her, the objective for the Commission, the Pension Fund Administrators (PFAs) and Pension Fund Custodian (PFCs) is to facilitate the development and validation of implementation plans for five strategic themes of the industry.

    The themes include excellence in service delivery, inclusive and expanded coverage, low cost and efficient industry, positive real returns and visible impact and professional and qualified human capital.

    She said the leaders discussed actions, projects, resource requirement, milestone and details for each strategic theme.

    She said they would plan the implementation team for each project and on resources, including human capital, financials, among others.

    Also, they agreed, she said, on the monitoring and evaluation process, such that the next retreat would include performance review on progress to be made.

    The discussion, she pointed out,  considered the output of last year’s World Pension Summit-Africa Special.

  • Employees, retirees advised to engage PFAs

    Employees, retirees advised to engage PFAs

    Employees and retirees under the Contributory Pension Scheme (CPS) have been advised to always engage their pension fund operators on returns on  their contribution.

    The Managing Director, Premium Pension Ltd, Wilson Ideva, who gave the advice in Abuja, said this is important so that they could keep a tab on what is happening to their savings.

    Pension Fund Operators (PFAs) have been duly licensed to open Retirement Savings Account (RSA) for employees, invest and manage their pension funds.

    Ideva also urged employees and retirees to check and verify their monthly RSA statement sent to them by their PFAs.

    He noted that a lot of people don’t check their statements neither do they engage their PFAs on the returns earned from the pension investment.

    He said the CPS has gained public confidence in the past 10 years.

    He said: “There is no doubt that CPS has gained public confidence and acceptability. As at June 30 this year, 6.63 million employees from both the Public and Private Sectors have opened RSAs.

    “The Scheme has accumulated over five trillion naira worth of pension assets over the same period with a monthly inflow of about N30 billion and an average of 30 per cent annual growth rate.

    “The CPS has grown tremendously to the point that what we are looking at now are measures of the next level for the industry, which is harmonising best practices across African continent. The kind of measure that you are sure of, what you are going to meet when you retire.”

    He pointed out that the growth achieved by operators in the past 10 years has posed new challenges to pension operators.

    According to him, the challenges include profitable investment, service delivery and harmonisation of service delivery.

    He said operators are going to address these challenges as they learn from other countries in other to build a pension industry that will be an envy of other countries.

  • Fed Govt owes PFAs N35b pension contribution, says NLC

    The Nigerian Labour Congress (NLC) yesterday accused the Federal Government of contravening the Pension Reforms Act by failing to remit its contributions and deductions from workers’ salaries to the various Pension Fund Administrators (PFAs).

    The workers also took a swipe at the new Group Managing Director, Nigeria National Petroleum Corporation (NNPC) for calling for the removal of subsidy on petroleum products, saying it was unfortunate that the GMD has not read the lips of President Muhammadu Buhari.

    Speaking during the opening of the National Leadership Retreat of the Congress in Calabar, its President, Comrade Ayuba Wabba, said  the government has failed to remit about N35billion contributory pension to the various PFAs.

    He said the Congress has written to President Buhari to direct all affected ministries, agencies (MDAs) and parastatals, to immediately remit these funds without further delay to the PFAs.

    He said: “Comrades would recall that we were persuaded to move away from the defined benefit scheme, which was operational in the entire public service of the federation, to the new contributory scheme, in which the workers also contribute part of their monthly salary to fund the new scheme, because of the unviable funding of the old scheme.

    “Eleven years into the operation of this new scheme, and with last year’s review of the Pension Reform Act, it has only recently come to our attention that even the Federal Government is not keeping to the letters of this contributory pension scheme, as it has so far failed to remit the contributions of both itself as an employer and the deductions from employees salaries – both totalling N35 billion, to the respective PFAs.’’

    He added: “We have written to President Buhari to draw his attention to this illegality, and requested him to direct the affected ministries, agencies and parastatals, to immediately remit these funds without further delay to the respective PFAs.

    “During our last National Executive Council (NEC) meeting in Abuja earlier this month, we received reports about a number of states being in default in the payment and remittances of workers pension deductions, and the mandatory employers’ deductions, which is referred to as matching fund.

    “NEC had already mandated the Congress leadership to mobilise workers to ensure that the arrears of workers’ salaries, allowances and pensions are cleared by the affected state governments. The Federal Government cannot afford to be listed as among the debtor bodies. It has to lead this exercise by sheer force of example.”

  • PFAs violating pension laws

    A review of the compliance reports sent by Pension Fund Operators (PFAs) to the National Pension Commission (PenCom) has raised questions about non-compliance by some PFAs.

    This was contained in PenCom 2015 First Quarter Report about its regulation and supervision on the pension industry.

    The issues of non-compliance by the PFAs range from non-compliance with investment limits; delay in the payment of retirement benefits; receipt of pension contributions without appropriate schedules; unresolved customer complaints; and non-implementation of disaster recovery plans.

    These anomalies have been persistent and reoccurring among PFAs as shown in PenCom quarterly reports and they violate the Pension Reform Act, 2014.

    The Commission said it had informed the operators as well as monitored them  to resolve the identified issues.

    The report further revealed that the Commission’s regulation and supervision of the pension industry continued to focus on risk-based examination of licensed pension operators with a view to promote transparency, provide early warning signals as well as encourage pension operators to regularly self-evaluate their positions.

    A  review of risk management reports showed that some of them faced operational risks associated with receipt of contributions without appropriate schedules, litigations, concentration of portfolio investment, and non-funding of RSAs by employers.

    The commission advised the affected operators to strengthen their mitigating measures to avert the risks.

    On actuarial valuation, the Commission received and reviewed the actuarial valuation reports of seven Defined Benefit Schemes and another report from a scheme sponsor for the year which ended on December 31, 2014.

    A review of the eight reports, however, revealed that only two of the schemes were under-funded as at the end of the reporting period.

    Consequently, the affected sponsors were directed to come up with funding arrangements to defray the deficits.

    During the quarter, the Commission received and reviewed 23 corporate governance reports from licensed operators for the year which ended on December 31, 2014.

    The reports indicated some violations of the Code of Corporate Governance by the operators.

    The review further showed that some operators did not evaluate the performance of their Boards, Board Committees and Directors; and held inadequate number of Board meetings as stipulated by the Code.

    In addition, some directors did not attend Board and Committee meetings regularly.

    Subsequently, the affected operators were asked to address the identified issues of non-compliance with the Code of Corporate Governance.

    Section 92 (1) of the Act on supervision and examination of the PFAs states that PenCom shall at least once in each year authorise an inspection or examination as the case may be of the PFAs, Pension Fund Custodian (PFCs), Federal Pension Transitional Arrangement Directorate and Federal Capital Territory Pension Transitional Arrangement

    Section 85 of the PRA on investment of pension fund states that all contributions made under this bill shall be invested by the pension fund administrators with the objectives of safety and maintenance of fair returns on amount invested. It also states that the funds and assets shall only be invested in accordance with regulations and guidelines issued by the commission from time to time. These include bonds, bills and other securities issued or guaranteed by the federal government and the central bank of Nigeria; states and local governments among others.

    Section 87 further states that a PFA may invest the pension funds in units of any investment outside Nigeria within the categories of investments set out in Section 86 of the Act and subject to the subsisting Central Bank of Nigeria (CBN) foreign exchange rules, the commission may recommend to the president for approval, the portfolio limits for investment of pension fund assets outside the territory of the Federal Republic of Nigeria.

    Section  88 states: “A PFA shall not invest pension fund assets in any shares or other securities issued by a PFA or PFC and a shareholder of the PFA or PFC.’’

    Section 91 states that any PFA who fails to comply with any provision of the Act shall be liable to a penalty of not less than N500,000 for each day that the non-compliance continues and the PFA shall forfeit the profit from that investment to the beneficiaries of the retirement savings accounts and where the investments has led to a loss, the pension fund administrator shall be made to make up for the loss.

  • PFAs’ programmed withdrawal plan hits N228b

    PFAs’ programmed withdrawal plan hits N228b

    The number of retirees, who chose Programmed Withdrawal plan option for pension payments after retirement under the management of Pension Fund Admistrators (PFAs),  has continued to grow as total lump sum on Programmed Withdrawal has increased to N228.09 billion from inception of the scheme to the end of the second quarter, last year, Director-General, National Pension Commission (PenCom), Chinelo Anohu-Amazu, has said.

    The PenCom boss, who made this known to reporters, disclosed that a total premium of N7.74 billion was approved for payment to insurance companies.

    She said retirees under the Programmed Withdrawal plan increased from 86,628 in the first quarter of last year to 92,373 in the second quarter, representing an increase of 6.63 per cent,

    She added that the total number of retirees in private and public sectors has shown that the public sector cumulatively accounted for 74,119 retirees while the private sector cumulatively accounted for 18,254 retirees, representing 80.24 per cent and 19.76 per cent respectively.

    She explained that retirement by Life Annuity plan in the period under review received a boost from the retirees as a result of the sensitisation programmes to create awareness embarked upon by the Commission.

    She stressed that this is evidenced by the increase in the number of retirees on annuity plan from 9,212 as at the end of the first quarter to 11,115 as at the end of the second quarter, representing an increase of 20.67 per cent.

    Based on this result, she said a total premium of N7.74 billion was approved for payment to insurance companies on behalf of the 1,903 retirees in return for an average monthly pensions amounting to N26.32 million

    She said: “In general, 89.26 per cent of the retirees were on Programmed Withdrawals while the remaining 10.74 per cent were under Life Annuity.

    “Also in the second quarter, the Commission granted the approval for the payment of N3.48 billion, being 25 per cent of Retirement Saving Account (RSA) balances to 9,549 RSA holders of which 8,685 were from the private sector and 864 from the public sector.”

    She further said that approvals were given by the Commission on Death Benefits

    “During the quarter, approvals were given for the payment of N6.12 billion as death benefits to the Next-of-Kin (NOKs) of 2,475 deceased employees. A cumulative sum of N59.12 billion had been paid to the NOKs of 22,611 deceased employees from inception to the end of the second quarter.

    “The Commission continued its sensitisation programmes and engagement of employers as part of measures to deepen compliance and implementation of the Group Life Insurance Policy,” she added.

    Programmed withdrawal refers to periodic or regular withdrawals of funds which may be on monthly, quarterly basis etc. An RSA holder upon retirement or attaining the age of  50 years whichever is later can request for the balance in his RSA to be paid out to him via programmed withdrawals. The periodic payment is not expected to be less than 50 per cent of the RSA holder’s annual terminal remuneration as at the date of retirement, provided there is sufficient balance in the RSA.

    You can also withdraw money from your Voluntary Contribution (VC) Account via programmed withdrawals. The withdrawals will, however, be subjected to Personal Income tax where it is made before the end of 5 years from the date the voluntary contribution was made.

    Annuity is a periodic payment for life from insurance company. A retired member may choose to access his retirement benefits by buying an annuity for life from a Life Insurance Company approved by the National Pension Commission. Under this option, the amount required to fund the annuity purchase will be transferred by GTB-AM Pensions from your RSA to the Insurance Company, and the Insurance Company will become responsible for making payments to the member in accordance with the terms of the Annuity Purchase.

  • 11 PFAs exceed investment limits, others

    Eleven Pension Fund Administrators  (PFAs) overshot their investment limits in the second quarter of last year, the National Pension Commission (PenCom) has said.

    It said Section 7 of the Pension Reform Act 2014 on ‘Regulations on Investment of Pension Fund Assets’ stipulates that not more than 10 per cent of the total pension assets under management shall be invested in all instruments/securities, which include equity, money market and debt issued by a corporate entity.

    It said: “PFAs shall ensure that not more than 45 per cent of pension assets under its management are directly or indirectly invested in any one sector of the economy.’’

    PenCom’s Director-General, Mrs Chinelo Anohu-Amazu, said in its Second Quarter Report made available to journalists that during a routine examination of 11 PFAs in the period under review,  the PFAs were found guilty of delays in the payment of retirement benefits; receipt of pension contributions without appropriate schedules; unresolved customer complaints; failure to fill certain vacant management positions; and non-implementation of disaster recovery plans.

    She said the examination, which was risk-based, covered 11 areas of the PFAs’ operations.They included company, board and management operations; information and communication technology; pension administration; benefits administration and payment arrangements; and fund management.

    She said: “Other areas included risk management and compliance, service delivery as well as internal control systems.The draft report of the routine examination had since been communicated to the boards of some of the PFAs.

    “The examination report had since been discussed with concerned PFAs’ management and commitments were obtained for remedial actions to be carried out by the operators examined.”

    The PenCom chief added that evaluation of risk management reports forwarded by the operators showed that some operators faced operational risks associated with receipt of contributions without appropriate schedules. She said they also faced litigations, concentration of portfolio investment, and non-funding of RSAs by employers, adding that the affected operators were advised by the Commission to strengthen their mitigating measures to avert the identified risks.

    She further said the Commission received and reviewed the actuarial valuation reports of 10 Defined Benefit Schemes for the year ended 31 December, 2013.

    “The reports revealed that some of the schemes had some funding gaps as at the end of the reporting period.

     

    Consequently, the affected scheme sponsors were directed to come up with funding arrangements with a view to clear the identified shortfalls.

    “During the quarter, the Commission received and reviewed 28 corporate governance reports from licensed operators. The reports indicated some violations of the Code of Corporate Governance by the operators.

    “The review further showed that some operators did not evaluate the performance of their Boards, Board Committees and Directors; and did not hold inadequate number of Board meetings as stipulated by the Code.

    “In addition, some Board members did not attend Board and Committee meetings regularly. Subsequently, the affected operators were asked to address the issues of non-compliance with the Code of Corporate Governance.

    On the Returns Rendition System of the operators, Mrs Anohu-Amazu said 30 operators rendered returns on the funds under their management and their company accounts to the Commission through the Pension Returns Rendition System (PenRRS).

    “The Commission scaled up its compliance and enforcement strategies to enhance compliance with the provisions of the Pension Reform Act (PRA) 2004. Consequently, sanctions were applied in line with the Compliance Framework.

    “In addition, the Commission had participated in public enlightenment programmes as well as collaborated with various stakeholders to enhance compliance,” she added.

  • Edo set to announce PFAs for contributory pension

    Edo set to announce PFAs for contributory pension

    The process for appointing Pension Fund Administrators (PFA) that will manage the pensions of Edo State pensioners is ongoing, The Nation has learnt.

    Public Relations Officer to the State Head of Service, Sam Okpeaye, who made this known, said the PFAs will set the pace for the commencement of Contributory Pension Scheme (CPS) in the state.

    He said plans to implement the contributory pension scheme in the state civil service were concluded last year by the Governor, Comrade Adams Oshiomole adding that the successful PFAs would soon be announced.

    He explained that compilation of adequate data of pensioners was part of the reasons for delay in implementing the new pension scheme.

    He said efforts are also being made to pay arrears owed pensioners before the present government.

    The National Pension Commission (PenCom) had said that states in the federation have continued to make progress in implementing the CPS.

    PenCom said that as at first quarter of 2013, 21 state governments have enacted their pension laws, 14 states were at the bill stages, while one state was yet to commence the process of implementing the CPS.

    Specifically, the eight states that are in full compliance having enacted their pension law and commenced contributions are Lagos, Ogun, Delta, Kaduna, Jigawa, Osun, Niger and Zamfara.

    The 13 states that are in partial compliance having enacted their pension law but yet to start contributions are Edo, Kogi, Ekiti, Bayelsa, Kebbi, Taraba, Imo, Kano, Oyo, Rivers, Sokoto, Akwa-Ibom, and Nasarawa.

    The remaining 14 states in the process of enacting their pension law are Anambra, Enugu, Gombe, Ondo, Abia, Plateau, Bauchi, Katsina, Benue, Borno, Yobe, Cross River, Kwara and Ebonyi.

    Only Adamawa State out of the 36  is yet to take any step to implement the CPS.

  • Premium Pension holds AGM today

    Premium Pension Limited, one of the Pension Fund Administrators (PFAs) in the country, is holding its Ninth Annual General Meeting (AGM) today at 10am.

    The event is slated for the company’s corporate headquarters in Abuja.

    Chairman of the company, Mr. Aliyu Dikko, said the company  has over N330 billion under its management and has so far paid almost N63.2 billion as retirement benefits while 13, 350 retirees receive pension every month through the company.

    According to him, the company has continued to maintain its enviable position as one of the leading PFAs in Nigeria despite the declining employment opportunities that negatively impacts business generation drives.

    He said the company has expanded its horizon in terms of funds under management and number of Retirement Savings Accounts (RSAs).

    Managing Director, Wilson Ideva also said the company and by extension the industry has virtually overcome its teething challenges and is now striding to great heights.

  • PFAs invest N2.7tr in FGN bonds, bills

    PFAs invest N2.7tr in FGN bonds, bills

    About N2.7 trillion out of the N4.21 trillion pensions fund assets has been invested in FGN Securities as at March 31, 2014 by Pension Fund Administrators (PFAs), representing 63.39 per cent investment of the fund, The Nation has learnt.

    The PFAs also invested N602 billion in shares on the Nigerian Stock Exchange in the period under review. This represents a 14.3 per cent investment of the fund.

    The volume of traded shares in March was a little lower compared to the N619 billion traded as at February 28, 2014 out of the N4.12 trillion pension fund assets recorded in the month.

    This was revealed in a document obtained by The Nation from the National Pension Commission (PenCom) titled: ‘Summary of Pension Fund Assets as at March 31, 2014’.

    A breakdown of the report showed that a volume of Domestic Ordinary Shares of N548.7 billion was traded in March while Foreign Ordinary Shares of N53 billion was also traded.

    Similarly, N195.2 billion and N79.9 billion was invested in State Government Securities and Corporate debt securities respectively while N1.7 billion was invested in Supra-National bonds.

    A total of N228.4 billion was invested in the Real Estate Properties while N9.3 billion was invested in the Private Equity Fund.

    The report further showed that N335.2 billion was invested in the Local Money Market Securities, N286 billion in Foreign Money Market Securities and N22 billion in Open/Close End Funds.

    The Commission had N46.2 billion in cash and other assets during the period under review.

    The Acting Director-General, PenCom, Mrs. Chinelo Anohu-Amazu, while speaking on Regulation on Investment of Pension Fund Assets said Pension Fund Custodians (PFCs) shall only take written instructions from licensed PFAs with respect to the PFAs investment and management of pension fund assets held in the custody of the Pension Fund Custodian (PFCs) on behalf of the Contributors.

    She said the PFCs, in discharging their contractual functions to PFAs, shall not contract out the custody of pension fund assets to third parties, except for allowable investments made outside Nigeria.

    Furthermore, she said that the PFC shall obtain prior approval from the Commission before engaging a global Custodian for such allowable foreign investments.

    She said: “The PFAs, in discharging their contractual functions to Contributors under the new Contributory Scheme shall not contract out the investment or management of pension fund assets to third parties, except for open or close end or hybrid funds and specialist investment funds allowed by the regulation.

    “The PFAs shall maintain RSA ‘Active’ and ‘Retiree’ Funds, as provided to govern the investment of pension fund assets until effective implementation of the Multi-Fund Structure. In addition to the requirements of other guidelines issued by the Commission on corporate governance, ethics and business practices, each PFA shall establish an Investment Strategy Committee as well as a Risk Management Committee, in compliance with Section 66 of the Pension Reform Act, 2004 (“the Act” or “PRA 2004”).

    “The Investment Strategy Committee, in addition to other functions specified in the Act, shall formulate internal investment strategies to enable compliance with this Regulation, taking into cognizance the macro-economic environment as well as the investment objectives and risk profile of the PFA Funds.”

    The PenCom boss said the internal investment strategies shall be approved by the PFA at a board meeting at least once yearly or as frequently as changes occur in the macro-economic environment that may affect pension fund assets.