2020 HY Examination of Pension Operators by PenCom

The National Pension Commission (PenCom) being the Regulator for pension in Nigeria reviews the activities of all pension fund operators in Nigeria. PenCom has released its report on the review of activities of pension fund operators for January to June 2020.

The report covers, On-Site Examination & Off-Site Analysis, Risk Management Analysis System (RMAS), Compliance Reports, Presentation of 2019 Routine Examination Reports, Annual General Meetings, Control Function Reports and Regulatory Interventions.

On-Site Examination & Off-Site Analysis

In the 1st quarter of 2020, PenCom temporarily suspended all On-Site Examination of Pension fund Operators as part of measures to contain the spread of the novel Coronavirus. PenCom however, strengthened the Off-Site Surveillance and Analysis of Pension fund Operators’ activities with the development of additional reporting templates and increase in the frequency of rendition of some reports, from quarterly to monthly. The additional reporting templates were developed to provide more information and increased monitoring of Operators’ activities.

PenCom continued its enhanced Offsite analysis and monitoring of the activities of the Licensed Pension Fund Operators in the 2nd quarter of 2020. PenCom ensured that regular follow-ups were carried out with relevant Operators to address noted exceptions and outstanding commitments from the 2019 routine examinations.

Risk Management Analysis System (RMAS)

A total of 32 Licensed Pension Operators, comprising of 22 Pension Fund Administrators (PFAs), 4 Pension Fund Custodians (PFCs) and 6 Closed Pension Fund Administrators (CPFAs) rendered the returns on the Funds under their management/custody as well as their Companies, for the quarter ended 30 June 2020. The returns from the Operators were reviewed by PenCom and found to be in line with regulatory requirements.

Compliance Reports

PenCom reviewed the compliance reports of pension operators and observed that the key issues in the compliance reports were high un-credited pension contributions, delays in the payment of retirement benefits to retirees and unresolved outstanding commitments from 2019 routine examinations. The pension operators were directed to expedite the regularization of the noted exceptions.

Presentation of 2019 Routine Examination Reports

PenCom presented the 2019 Routine Examination Reports to the Board of Directors of 21 Pension Fund Administrators (PFAs), 6 Closed Pension Fund Administrators (CPFAs) and 4 Pension Fund Custodians (PFCs) in line with the provisions of section 95(2) of the Pension Reform Act 2014. Comments and feedbacks from the various Boards were noted, with assurances given on the implementation of PenCom’s recommendations on noted exceptions in their operational activities. However, the 2019 Examination Report of one PFA was yet to be presented, due to the inability of its Board to form a quorum. PenCom did not name the PFA but we suspect its First Guarantee Pension Limited because of the issues we have earlier highlighted here

Annual General Meetings

PenCom disclosed in its 2nd quarter report that due to the impact of Covid-19 pandemic, 26 pension operators had virtual Annual General Meetings (AGM) with PenCom in attendance, while Six (6) pension operators were yet to conduct their AGMs as at the end of Q2, 2020.

Control Function Reports

The reviews of the control function reports submitted by Licensed Pension Operators revealed relative high compliance with stipulated guidelines and regulations. However, most of the risk management reports of Pension Fund Administrators (PFAs) focused, primarily, on investment/market risks.

Regulatory Interventions

PenCom successfully handed over the management of a PFA, that had been under regulatory intervention, to the shareholders on 1 May, 2020, following the Court of Appeal Judgement delivered on 20 April, 2020. More details available here, National Pension Commission Press Release on First Guarantee Pension Limited

Also check out

Performance of all PFAs as at June 2020

Performance of all PFAs as at July 2020

Performance of all PFAs as at August 2020

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