PenCom probes PFAs over corporate governance, others

PenCom probes PFAsThe National Pension Commission (PenCom) has investigated some Pension Fund Administrators (PFAs) over corporate governance matters, irregularities in payment of death benefits and service delivery issues.

In its 4th Quarter (Q4) 2018 report, the Commission said other major issues observed from the review of the PFAs compliance reports are multiple PIN registration, uncredited pension contributions, exposure to Federal Government bonds and treasury bills relative to Net Asset Value (NAV) and delay in the payment of retirement benefits.

Others were payment of accrued rights of treasury funded retirees and outstanding commitments from previous routine examinations carried out by the commission.

The Commission said it also carried out special/target examination on Veritas Glanvills Pension Limited and Unico CPFA Limited, winding down of operations.

The report reads: “The Commission maintained its consultative philosophy in the regulation and supervision of the pension industry during the quarter under review. The risk-based examination approach was implemented as a way of promoting transparency and providing early warning signals as well as encouraging pension operators to regularly self-evaluate their positions.

“While carrying out surveillance on the industry, the Commission conducted routine examinations of 31 licensed operators comprising 21 PFAs, 6 Closed Pension Fund Administrators (CPFAs) and 4 Pension Fund Custodians (PFCs), using the new Risk Based Supervision (RBS) model.

“The new approach is in line with the RBS methodology adopted by the Financial Services Regulation Coordinating Committee (FSRCC).

“The Commission also carried out special/target examination on the following operators:  Veritas Glanvills Pension Limited; and  Unico CPFA Limited (wounding down of operations).

“The Commission also undertook several investigative activities during the period under review. The investigations were prompted by complaints from customers, whistleblowers and information from offsite surveillance. The investigations covered issues bordering on corporate governance matters, irregularities in payment of death benefits and service delivery issues.

“The Commission also reviewed monthly compliance reports submitted by pension operators. The major issues observed from the review of these reports were multiple PIN registration, uncredited pension contributions, exposure to FGN bonds and treasury bills relative to Net Asset Value (NAV) and delay in the payment of retirement benefits. Others were payment of accrued rights of treasury funded retirees and outstanding commitments from previous routine examination.

“During the quarter under review, pension operators forwarded their corporate governance reports. The major issues observed from the review of these reports were inadequate size of the boards, non-submission of annual performance evaluation of the individual directors and inclusion of executive directors as members of the Board Audit Committee. In addition, board and committee meetings were held same day and some directors were members of all the board committees. The operators concerned were required to ensure that they address the above issues.”