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The National Pension Commission (PenCom) in a bid to ensure sufficient oversight and supervision of risk management processes, has directed Risk Management Departments of all Pension Fund Administrators (PFAs) with Funds Under Management (FUM) of N100 billion and above to report directly to the Managing Director/Chief Executive Officer.
PenCom stated this in a circular signed by its Head, Surveillance Department, Mohammed Datti on January 19, 2018 and issued to all licensed pension fund operators.
According to PenCom, the directive takes immediate effect and supersedes the previous circular on the same issue released on June 27, 2011.
The circular reads: “The commission’s circular on PFAs with funds under management of N100 billion and above dated 27 June, 2011 highlighted the following departments that are to report to the MD/CEOs of the PFAs with fund under management of N100 billion billion and above, Legal/Company Secretary; Internal Audit and Compliance.
“However, as the risk management function is a vital control function for management, it is impressive that Risk Management Department of PFAs also report to the MD/CEO to ensure sufficient oversight and supervision of the risk management process.
“Consequently, Risk Management Department in all PFAs with fund under management of N100 billion and above shall be required to report directly to the MD/CEO.”