PenCom released 14 Subsidiary Legislations for the Pension Industry in 2019 – PensionNigeria

PenCom released 14 Subsidiary Legislations for the Pension Industry in 2019

National Pension Commission (PenCom) disclosed in its 2019 Approved Annual Reports that it released fourteen (14) subsidiary legislations, i.e Regulations, Guidelines and Frameworks, during the year 2019 to further enhance the pension industry in Nigeria.

PenCom stated that all the Regulations, Guidelines and Frameworks issued are available on its website but we checked and observed that only Six (6) are available on PenCom’s website. We have detailed below a summary of all the subsidiary legislations released by PenCom in 2019 and links to read further where available.

i. Addendum to the Circular on Death Benefits
This addendum was issued to resolve the challenges faced by Pension Fund Administrators (PFAs) in the course of implementing the procedures stipulated in the 2018 revised circular on the payment of death benefits. The addendum clarified some provisions of the existing circulars and added some new procedures to address identified challenges. Read the Addendum to the Circular on Death Benefits here

ii. Circular on Issues on the Transition from Contributor Registration System (CRS) to the Enhanced Contributor Registration System (ECRS)
Following the migration from the CRS to the ECRS in 2019, this circular was issued to reiterate the various issues that may arise during the transition, the Commission’s expectations and other key requirements.
Read National Pension Commission (PenCom) Deploys Enhanced Contributory Registration System
Read the Circular on Issues on the Transition from CRS to ECRS here

iii. Circular on Implementation of the Requirements for the Provision of Fidelity Insurance Cover for Employees of PFAs/PFCs
This Circular clarified the new requirement for the procurement of annual Fidelity Insurance Cover for employees of the PFAs/PFCs in line with section 69 (f) of the PRA 2014. The circular reduced coverage of the fidelity insurance from the full value of pension funds/assets under management/custody to a minimum of 2% of the shareholder’s fund of the operators. Read Additional Protection for Pension Funds Under Contributory Pension Scheme

iv. Addendum Guidelines for Appointment to Board or Top Management Positions of PFAs/PFCs
This Guideline specified the revised requirements for minimum qualification for appointments to the Board and Top Management positions of licensed PFAs and PFCs. The Addendum Guidelines for Appointment to Board or Top Management Positions of PFAs/PFCs is not available on PenCom”s website.

v. Circular on Corporate Governance for Licensed Pension Fund Operators
Following issuance of the Nigerian Code of Corporate Governance 2018 by the Financial Reporting Council (FRC) of Nigeria, the Commission developed industry specific Corporate Governance Guidelines for Pension Fund Operators (PFOs) which contained the minimum corporate governance requirements and encouraged the PFOs to aspire for higher standards. Read Circular on the Implementation of Nigerian Code of Corporate Governance by Pension Fund Operators (PFOs) here

vi. Amended Regulation on Investment of Pension Fund Assets
The Regulation on Investment of Pension Fund Assets was updated in line with market development and issued in February 2019. It introduced new regulations for investment of the Micro Pension Fund and the Non-Interest Fund. You can read it here

vii. Circular on Fee Structure on Micro Pension Fund
The Circular was issued to guide Operators on charging of management fees on the Micro Pension Fund (i.e. Fund V) pending the issuance of the Regulation on Fees Structure for the Micro Pension Fund. The Circular is not available on PenCom’s website.

viii. Circular on Flagging and deletion of Personal Identification Numbers on Pension Fund Administrator Databases
The Circular was issued to acquaint Pension Fund Operators with the circumstances which may warrant the flagging or deletion of PINs on their databases as well as the required approval. The Circular is not available on PenCom’s website.

ix. Circular on Substandard Data Quality
This circular mandated PFAs to ensure that they upload only data that conform with requirements specified by the Commission, so as to maintain the integrity of the ECRS database. The Circular is not available on PenCom’s website.

x. Framework for the transfer of Retirement Savings Accounts to NUPEMCO
Sequel to the issuance of a Pension Fund Administrator license to the Nigerian University Pension Management Company (NUPEMCO) to exclusively administer the RSAs of employees of the Universities and Tertiary Institutions, the Commission issued the Framework, which set out the modalities for ensuring the transfer of the RSA records of members and their corresponding assets from other PFAs to NUPEMCO. The Framework is not available on PenCom’s website.

xi. Circular on Pension Protection Fund Levy
The Circular set out and clarified the modalities for funding the Pension Protection Fund (PPF) by a pension fund operator in line with Section 82 of the PRA 2014. The Circular is not available on PenCom’s website.

xii. Revised Guidelines for Retirement Savings Account Registration
The Guidelines establishes a uniform set of rules and standards for the registration of contributors in both the formal and informal sectors of the Nigerian economy, as well as Cross Border individuals, by PFAs. It outlines the RSA registration process to ensure that contributors’ data submitted to the Commission by PFAs meet the minimum thresholds as well as processes for the generation of employer codes. The Revised Guidelines is available here

xiii. Revised Circular on Payment of Dividend to Shareholders
This circular mandated all Pension Fund Operators to forward all requests for dividends payments (interim and final) together with a Dividend Policy, Board Resolution approving the dividend payment and Audited Accounts of the Licensed Pension Fund Operator for the commission’s approval. The Revised Circular is not available on PenCom’s website.

xiv. Circular on Payment of Audit Fees for Pensions Funds
This circular directed pension operators to pay audit fees in two equal tranches i.e; an advance payment and the balance upon submission of the audited accounts to the Commission. The Circular is not available on PenCom’s website.

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