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Chuks Udo Okonta
Some Pension Fund Administrators (PFAs) are already reaching out to Retirement Saving Account (RSA) holders to position themselves for opportunities to be created by the circular on Strengthening the Administration of Retirement Benefits under the Pension Reform Act (PRA) 2014, issued recently by the National Pension Commission (PenCom).
A mail, sent by one of the (PFAs), ARM Pensions Limited, entitled: Update from your Preferred Pension Administrator, which was obtained by this medium, reads: In a bid to ensure consistency with the PRA 2014 and to strengthen the administration of retirement benefits, the commission has by a circular to all PFAs dated the 3rd of November 2016 resolved that;
1. The custody of retiree life annuity be domiciled with Pension Fund Custodian (PFC)
2. All Life Insurance companies currently providing retiree life annuity for retiree are to open operational accounts jointly with a PFC and transfer the corresponding pension assets in their custody to the PFC of their choice within three months.
3. The approval of new annuity requests is hereby put on hold with immediate effect until life insurance companies meet custody and transfer conditions.
The circular, which has unsettled the insurance industry, has been considered, anti-annuity operations.
A top management officer of the Nigerian Insurers Association (NIA), told Inspenonline that if PenCom goes ahead to implement the mandate, Pension Fund Administrators (PFAs) would leverage it to de-market annuity business, a development which would not be good for pension benefits operations in the country.
He noted that the association is engaging the National Insurance Commission (NAICOM) to see that the circular is withdrawn, stressing that the association has also reached out to PenCom to resolve the issue.
A stakeholder, who spoke on the alleged de-marketing by insurers, urged the affected life insurance companies to urgently comply with the directive given by PenCom, stressing that they have nothing to lose if they can quickly open the proposed accounts and transfer the assets in their custody.
He urged insurers to be proactive, and create the accounts, to forestall the alleged de-marketing of their business. He noted that the decision was taken in the best interest of the retirees and operators.