PenCom Moves To Curb Unfunded Retirement Savings Accounts
The National Pension Commission has ordered Pension Fund Administrators to ensure that all remitted contributions are credited into the Retirement Savings Accounts of the workers.
This is to reduce the number of unfunded RSAs of workers under the Contributory Pension Scheme.
PenCom disclosed this in its quarterly report on ‘Update on the on-site analysis of pension fund operators’.
Part of the report read, “The review of the operators’ activities during the third quarter of 2020 indicated substantial compliance with the extant laws and regulations issued by the commission.
“The key area of regulatory concerns were the rise in unfunded RSAs.
“The 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.”
PenCom stated that it suspended the 2020 on-site examination of pension fund operators due to the COVID-19 pandemic.
However, it added, the enhanced off-site surveillance of pension operators continued through review of the monthly reports submitted by the operators.
It stated that 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.
Other notable observations from the compliance report were that all outstanding payment of retirement benefits approved by the commission 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, it stated.
PenCom stated that it granted approval to five private sector organisations and one public agency to establish additional benefits schemes for their employees in line with the provisions of Section 4(4)(a) of the PRA, 2014.
The commission stated that it issued a revised circular on the requirements for granting PFA and Pension Fund Custodians licenses, to reflect the provisions of the PRA 2014 and industry developments.
It added that it 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.