The National Pension Commission (PenCom) released a report on the various corporate governance activities it carries out while regulating the pension industry under the Contributory Pension Scheme (CPS).
See the full report below:
The Pension Reform Act 2014 (PRA 2014) provides requirements for licensing of Pension Fund Administrators (PFA) and Pension Fund Custodiana (PFC) prior to being entrusted with the management and custody of pension funds and assets.
PenCom authorises inspection and examination of PFAs, PFCs, Federal Pension Transitional Arangement Directorate and the Federal Capital Tentory Transitional Arrangement Directorate at least once a year, for the purposes of determining whether or not the provisions of the Act or any regulations made thereunder are being complied with.
Section 77(2) of the PRA 2014 prohibits a PFA from keeping any pension fund assets with PFC in which it has any business interest, shares or any relationship whatsoever. After examination, any PFA, PFC or body in relation to pension matters found erring or not complying with the Act, shall be sanctioned and penalised according to the provisions of the Act.
Pension funds and assets are kept in safe custody by the PFC and, as such, the liquidation of the PFA will not affect funds and assets. In such situations, PenCom will transfer the records of the failed or liquidated PFA to another PFA. In addition, every PFA is expected to maintain a statutory reserve fund, from its earnings, as contingency fund to meet claims for which it may be liable.
Pension funds cannot be borrowed directly by Governments at Federal, States and Local levels. However, PFAs are allowed to invest pension
The PRA 2014 provides PenCom with powers to order Special investigations of PFAs, PFCs or any person or body related to pension matters if it suspects that the PFA or PFC has been carrying out business not in the interest of the RSA holders; does not have sufficient assets to cover liabilities; has contravened with the provisions of the Act among others.
