FOR allegedly violating the Pension Reform Act (PRA) 2004 which directs all employers of labour with employees of 50 and above to open retirement savings account (RSA) for their workers, the National Pension Commission (PenCom) has sanctioned some 2,616 organisations, which have continued to disobey the law by refusing to open RSA accounts for their workers, in spite of repeated appeals by the regulatory authority last year.
This disclosure is contained in the PenCom Year 2010 Annual Report released in Abuja by the PenCom Director-General, Mr. Muhammad K. Ahmad, who also indicated plans by the Commission to again raise the capital base for Pension Fund Administrators (PFAs) and Pension Fund Custodians (PFCs) to ensure that only well and proper ones were engaged in the business of pension management, with the aim of guaranteeing the safety of workers' contributions. At present, the minimum capital required for the licensing of operators in the industry is N1.0 billion.
Ahmad disclosed that during the period under review, contributions by workers under the scheme had witnessed a remarkable increase in the value of pension fund assets from N1.529 trillion as at December 31, 2009 to N2.029 trillion as at December 31, 2010, indicating a 32.70 per cent growth.
He spoke on action against organisations that have continued to violate the implementation of the PRA: "In accordance with the Regime of Sanctions, 3,521 organisations were issued with warning letters for failure to respond to the letters requesting for evidences of compliance with the PRA 2004.
Similarly, monetary penalties were imposed on 2,616 organisations for continued violation of the provisions of the PRA, 2004. PenCom also imposed public censure on 292 recalcitrant organisations for continued violation of the PRA 2004 in 2010."
And to ensure that contributions under the scheme remained secured and retiring contributors get their entitlements as and when due, the director-general stated that the Commission was working on raising the minimum paid-up capital for operators in the sector to pave way for only serious and reliable stakeholders, while on its part, it would deploy modern state-of-the-art technology to supervise the industry to ensure success of pension administration in the country.
His words: "The pension industry has a promising future with the sustainable government support in creating the enabling environment for the industry to grow as well as continuous support of all stakeholders. PenCom would maintain its risk-based philosophy in order to promote transparency, provide early warning signals and encourage pension operators to regularly self-evaluate their activities particularly their investment decisions. The dynamic investment monitoring process would continue to be pursued in line with changes in the operating environment. Thus, the Commission would continue to be proactive in its regulatory and supervisory activities as well as leverage on the reforms in the banking and non-banking financial sector to promote growth of pension fund assets and ensure fair returns on pension fund investments.
"The Commission would leverage on the state-of-the-art information and communication technology to enhance its surveillance and supervisory activities on the industry. There is no doubt that the deployment of the Risk Management and Analysis System (RMAS) would enable PenCom obtain direct information on different activities of the Pension Fund Operators to ensure a safe and sound pension industry. Similarly, the Automatic Fingerprint Identification System (AFIS) would assist the Commission to identify multiple registrations using biometrics of the RSA holders. Finally, the Oracle e-Business Suite application would also enhance the efficiency of the operations of the Commission. Arrangements had already commenced toward ensuring the completion and implementation of these applications in 2011.
"The Commission would intensify its compliance and enforcement strategies through public enlightenments and awareness campaigns and prosecution of erring employers as well as continue to support the efforts of state governments in the implementation of the PRA 2004."
Ahmad added: "As part of its efforts to strengthen the pension industry, some strategic initiatives were outlined for implementation in 2011 as part of the Commission's strategic plan for the years 2010 to 2013. In order to ensure a strong and competitive pension industry that would be driven by fit and proper persons, the Commission would raise paid-up capital requirement for licensed operators. In addition, the guidelines for qualification of top management staff of licensed operators would also be updated towards achieving this goal. Already, work is ongoing in developing and implementing framework for supervision of states and local governments as well as Standard Operating Procedures for corrective actions, withdrawal and suspension of licence, mergers and acquisitions and contingency plan."
The Guardian