How PenCom monitored the Pension Industry in Q3 2020 – PensionNigeria

How PenCom monitored the Pension Industry in Q3 2020

National Pension Commission (PenCom) as the Regulator for the pension industry in Nigeria uses different parameters to monitor pension operators. During the 3rd quarter of 2020 PenCom monitored the pension industry using Off-Site Analysis, Risk Management Analysis System (RMAS) Reports, Annual General Meetings, Compliance Reports, Issuance of Circular / Framework and Approval of Audited Financial Statements.

Off-Site Analysis 

PenCom suspended the 2020 On-Site Examination of Pension Fund Operators due to the Covid-19 pandemic but the enhanced Off-Site Surveillance of Pension Operators continued through review of the monthly reports submitted by the Operators.

The review of the Operators’ activities during the 3rd quarter of 2020 indicated substantial compliance with the extant laws and regulations issued by PenCom. The key area of regulatory concerns were the rise in unfunded Retirement Savings Accounts (RSAs). The concerned Pension Fund Administrators (PFAs) were directed to ensure all remitted contributions are credited into the RSAs of the beneficiaries and also liaise with the respective employers to ensure up-to-date funding of the contributors’ RSAs.

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Risk Management Analysis System (RMAS) Reports

Pension Fund Operators are required to render periodic RMAS reports to PenCom. During the 3rd quarter 2020, all Licensed Pension Operators, comprising of twenty-two (22) Pension Fund Administrators (PFAs), four (4) Pension Fund Custodians (PFCs) and six (6) Pension Fund Administrators (CPFAs), rendered returns to PenCom on Assets under Management (AuM) and Company Accounts via the RMAS platform.

Annual General Meetings

One PFA held a virtual Extraordinary General Meeting during the period under review. The key highlights of the meeting was the change of their external auditors and appointment of a new one, pursuant to Section 409 of the Companies and Allied Matters Act (CAMA) 2020. PenCom did not disclosed the name of the PFA.

Compliance Reports

A review of the compliance reports forwarded by the pension operators during the quarter under review revealed a significant rise in the number of RSAs with un-credited pension contributions. The PFAs attributed the backlog of un-reconciled contributions to their skeletal workforce for processing the contributions, in compliance with the COVID-19 induced stay-at-home order. They were nonetheless, directed to ensure all pension contributions received during the lockdown were duly reconciled and credited to the respective RSAs of the contributors.

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Other notable observations from the Compliance Report were that all outstanding payment of retirement benefits approved by PenCom had been credited into the respective RSAs of the beneficiaries by the PFAs. The operators also met all the outstanding commitments due from previous routine examinations within the quarter.

Issuance of Circular and Framework

PenCom issued a revised Circular on the requirements for granting Pension Fund Administrator (PFA) and Pension Fund Custodian (PFC) Licenses, to reflect the provisions of the Pension Reform Act 2014 and industry developments.

PenCom also issued a framework for virtual meetings by Licensed Pension Operators, setting out the minimum standards and regulatory requirements for virtual meetings in the era of COVID-19 pandemic.

Approval of Audited Financial Statements

Pension Fund Operators are required to submit their Financial Statements to PenCom for approval before it can be published in the newspaper and on their website. During the 3rd quarter 2020, PenCom approved the 2019 Audited Financial Statements of the Company and Funds under the management of five (5) operators namely; Stanbic IBTC Pension Managers Limited; IEI-Anchor Pension Managers Limited; Premium Pension Limited; FCMB Pensions Limited; and Nestle Nigeria Trust Limited.

We track the publication of audited Financial Statements for PFAs and we can confirm that ONLY AXA Mansard Pension Limited, Radix Pension Fund Managers Limited, Trustfund Pensions Plc and Nigerian University Pension Management Company (NUPEMCO) are yet to publish their Company Financial Statements on their website while First Guarantee Pension Limited is yet to publish its Income Statement and Premium Pension Limited Abridged Audited Financial Statements on their website is unreadable and unacceptable and we have requested for a pdf copy.

UPDATE
2019 Financial Statements now available
AXA Mansard Pension Limited has sent us their Abridged Audited Financial Statements.
First Guarantee Pension Limited has uploaded their Abridged Audited Financial Statements on their website.
Premium Pension Limited has uploaded a clear copy of their Abridged Audited Financial Statements on their website.

2019 PFA Company Financial Statements STILL OUTSTANDING
Radix Pension Fund Managers Limited, Trustfund Pensions Plc and Nigerian University Pension Management Company (NUPEMCO). NUPEMCO has informed us that PenCom has approved their Financial Statements but NUPEMCO is yet to publish a copy on their website or send same to us.

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