PenOp Assures Pension Contributors Of Safety Of Their Funds with PFAs, PFCs
Members of Pension Fund Operators Association of Nigeria (PenOp) have assured pension contributors under the Contribution Pension Scheme (CPS) of the protection of the over N9.33 trillion pension funds and assets being managed on their behalf by Pension Fund Administrators (PFS) and Pension Fund Custodians (PFCs).
Head, Branding Committee, PenOp, Wale Odutola, who is also the Managing Director ARM Pensions Limited, at a press conference in Lagos, said the mandate by PenCom to operators to have Fidelity Insurance cover for their staff attested to the efforts by the regulator and operators to ensure the funds are adequately protected.
PenCom had mandated all PFAs and PFCs to procure a fidelity insurance policy to cover a minimum of two per cent of shareholders’ fund as annual insurance cover for their employees in circular with reference: PENCOM/INSP/CIR/SURV/19/167, entitled: Implementation of the Requirement for the Provision of Fidelity Insurance Cover for Employees of PFAs/PFCs, dated, June 18, 2018, signed by the Head, Surveillance Department, PenCom, Ehimeme Ohioma and sent to all pension fund administrators and custodians.
He said the recent mandate given to them by the National Pension Commission (PenCom) to procure a fidelity insurance policy to protect the over N9.33 trillion pension funds and assets from risks associated with negligence, fraud and other vices is part of the measures to secure the future of pension contributors.
According to the operators, the initiative which is in the Pension Reform Act (PRA) 2014, is an addition to the guarantee provided by banks which are the parents of the Pension Fund Custodians (PFCs).
He noted that the pension industry regulator and operators would continue to come up with new measures to steer the sector to lofty heights, adding that ensuring a better life style for contributors remains top priority to PenCom and members of PenOp.
President of the association, Mrs Aderonke Adedeji, urged Nigerians to embrace the Contributory Pension Scheme (CPS), which she noted was conceived to make life conducive for workers at retirement.
She also implored workers in the informal sector to leverage the micro pension plan to plan and secure their future, whilst pledging operators’ commitments to ensuring that contributors get better services and their benefits at retirement.
PenCom noted that Section 69 (F) of the Pension Reform Act PRA 2014, mandates PFAs and PFCs to provide annual fidelity insurance cover for all staff to the full value of the pension funds and assets managed or held by them or as may be determined by the commission.
The pension industry regulator maintained that the fidelity insurance cover will protect the pension funds and assets from risks associated with actions or inactions of employees of PFAs and PFCs like dishonesty; negligence; fraud; forgeries and other fraudulent acts that may result in fraudulent losses.
The commission stated that it is aware that based on the current value of the assets under management and custody in the industry, providing fidelity insurance cover up to the full value of pension assets would have astronomical costs implications to the pension operators.
PenCom said it takes cognizance of the subsisting guarantees provided by the parent companies of the PFCs for the full value of pension funds and assets held in custody on behalf of the Retirement Saving Account (RSA) holders or their beneficiaries.
