Director General, PenCom, Mrs. Aisha Dahir-Umar
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Chuks Udo Okonta
The National Pension Commission (PenCom) has mandated Pension Fund Administrators (PFAs) with micro pension fund under management below N5 million to stop paying fee charges.
PenCom in a circular, entitled; Circular on Fee Structure for the Micro Fund, signed by its Head, Surveillance Department, Ehimeme Ohioma, dated, May 4, 2021 and sent to all licensed pension fund administrators, stated that the move was to mitigate the concern of depletion of the micro pension fund.
It submitted that no fee shall be charged until the funds under management reach a threshold of N5 million, stressing that pension fund administrators shall not charge fees once the daily value of accounting unit of the fund falls below N1.00 and that this is to ensure the principal contributions are not eroded.
PenCom maintained that it shall not participate in micro pension fund fee regime until funds under management of a pension fund administrator attains the threshold of N4 billion.
The pension sector regulator said the review of the fee structure of the micro pension fund is in the light of challenges encountered in implementing the micro pension plan by licensed pension fund operators.
It posited that it had undertaken extensive consultations on the appropriate fee structure for the micro pension fund, which was expected to incentivize licensed pension fund operators to market the micro pension plan and grow micro pension assets, in order to achieve the objectives of the micro pension plan as outlined by the guideline.
Pension stressed that the circular takes immediate effect and supersedes its earlier circular issued on December 19, 2019 on fee structure for micro pension fund.