Failure to meet Pension Fund Administrator (PFA) requirements, the National Pension Commission (PenCom) has revoked the licence granted the Nigerian National Petroleum Corporation (NNPC) to operate a close ended Pension Fund Administration.
A letter addressed to the Group Managing Director of NNPC and signed by the Acting Director General, PenCom, Chinelo Anohu-Amazu, dated September 8, 2014, said the commission has noted the unwillingness of the corporation to comply with the provisions of the Pension Reform Act (PRA) 2014 and the conditions attached to the approval granted it to continue with the existing scheme. PenCom had granted temporary approval for NNPC Pension Fund to operate as a Close Pension Fund Administrator (CPFA) pending compliance with guidelines issued by the commission and the provision of the PRA. But it regretted that out of the five pending provisions, NNPC could not meet up with anyone.
PenCom said Section 50 (1) (g) of the PRA, 2014 and clause (b) (i) of the approval conditions provide that the scheme shall be fully funded at all times and that any shortfall shall be made up within 90 days.
“NNPC has breached this condition considering that the scheme has remained in deficits since inception in 2006, despite undertaking to transfer additional assets to address the deficit.
“Despite several commitments, NNPC has failed to provide the additional assets. As at December 31, 2012, the deficit in the scheme was N133.56 billion (inclusive of the N182.26 billion receivable from NNPC).
“The commission is concerned that eight years after the grant of approval to continue with the existing scheme, NNPC has failed to honour its promises to fund the deficit despite several commitments.”
Another violation, PenCom stated, was that Clause (b) (ii) of the approval conditions which provides that the funds and assets of the scheme shall be passed to licensed PFA(s) of NNPC’s choice for management but noted that it was in violation of the condition and section of the PRA 2014 by failing to transfer all funds and assets to licensed PFAs for management. Based on the actuarial valuation of December 31, 2012, only N97.52 billion or 26.43 per cent of the assets has been transferred to the PFAs for management.
Other breaches by the NNPC, according to PenCom, are failure to transfer real estate properties on the pretext that the PFAs were not adequately equipped for its (real estate) management, failure to transfer all pension fund assets to the custodian, failure to provide any undertaking to the commission since the approval of the scheme in July 2006 and that it did not provide evidence that employer and employee pension contributions were being remitted to the licensed operators as required by the PRA 2014.
The sources at the NNPC said since the inaugural meeting of the board members in 2012, no other meeting has been held, except the one by the establishment committee of the board chaired by Steve Oronsanya.
Copy of the NNPC management’s memo waiting for the approval of the board obtained revealed that plans were being made to meet the PenCom requirements.
Source : SunOnline