PenCom to PFAs: Comply with ground rules or be sanctioned

The National Pension Commission (PenCom) says it will sanction some Pension Fund Administrators (PFAs) for non-compliance with regulatory requirements on the management of the growing pension funds.

A compliance report forwarded by operators to PenCom  observed non-compliance with investment limits, delay in the payment of retirement benefits, and receipt of pension contributions without appropriate schedules. The report showed that some of the Retirement Savings Accounts of the workers were under-funded by employers.

Revealing that it had forwarded letters to the concerned operators while monitoring their efforts towards resolving the issues, PenCpm advised the concerned operators to strengthen their mitigating measures in order to avert the identified risks.

The Pension Reform Act (PRA) 2004 empowers the PFAs to manage the funds, while the Pension Fund Custodians (PFCs) are empowered to keep the money in their custody.

The PFCs are mandated to take instructions from the PFAs on the investment of pension funds and must not contract out the custody of pension assets to third parties, except for allowable investments made outside Nigeria, according to the latest investment guidelines released for the industry by PenCom.

Mrs. Chinelo Anohu-Amazu, acting director-general of PenCom, promised that the commission would remain steadfast in the implementation of the pension guidelines. She observed that prior to the enactment of the PRA, 2004, pension administration in the country was bedeviled by many challenges.

However, these challenges may not be over as there are fears over the purported decision of the Federal Government to compel PFAs to transfer an estimated N302billion in bulk, belonging to personnel of the Nigeria Police Force, to the newly established Nigeria Police Force Pensions Limited.

A fund administrator who spoke anonymously with TheCable expressed fears that the move may create portfolio risks and endanger the stability of existing PFAs.

“It is the statutory right of individual contributors, including police personnel to choose their PFAs by themselves under the contributory pension scheme, as provided in the Pension Reform Act 2004 so a transfer of funds would compromise this right,” he said.