Violation Of Regulations Persist In Pension Industry – PenCom

Some pension operators have continued to violate the regulation on investment of pension fund assets and code of corporate governance, among others, the National Pension Commission (PenCom) has affirmed.

While this issue of non-compliance with rules and regulations by the PFAs had been reported by PenCom since 2013, the commission also disclosed recently that some recalcitrant operators have continued to violate the provisions of the pension law in the country.

In a report for the first quarter of 2015, PenCom said a review of the compliance reports forwarded by Pension Fund Administrators (PFAs) to the commission during the period revealed some issues of non-compliance, which included: non-compliance with investment limits by some PFAs; delay in the payment of retirement benefits; receipt of pension contributions without appropriate schedules; unresolved customer complaints; and non-implementation of disaster recovery plans.

The commission, however, informed that these issues have been conveyed to the concerned operators as well as monitored them in their efforts at resolving the identified issues.

PenCom further disclosed that a review of the risk management reports forwarded by the operators showed that some of them faced operational risks associated with receipt of contributions without appropriate schedules; litigations; concentration of portfolio investment; and non-funding of Retirement Savings Accounts (RSAs) by employers.

Similarly, PenCom said the affected operators were subsequently advised by the commission to strengthen their mitigating measures to avert the identified risks.

During the quarter under review, the pension regulator stated that it received and reviewed 23 corporate governance reports from Licensed Operators for the year ended December 31, 2014, noting that the reports indicated some violations of the Code of Corporate Governance by the operators.

“The review further showed that some operators did not evaluate the performance of their Boards, Board Committees and Directors; and held inadequate number of Board meetings as stipulated by the Code. In addition, some Board members did not attend Board and Committee meetings regularly. Subsequently, the affected operators were asked to immediately address the identified issues of non-compliance with the Code of Corporate Governance,” PenCom added.

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