One of the strategic focus areas of the National Pension Commission (PenCom) is to ensure excellence in service delivery to stakeholders. This partly informed the recent increase in the Minimum Regulatory Capital (Shareholders’ Fund) requirements of Pension Fund Administrators (PFAs) from N1 billion to N5 billion.

Prioritisation of excellent service delivery by PFAs is expedient considering their functions. Section 55 of the PRA 2014 empowers PFAs to open Retirement Savings Account for all employees with Personal Identity Number (PIN) attached; invest and manage pension funds and assets and provide regular information on investment strategies, market returns and other performance indicators to PenCom and employees or beneficiaries of the RSAs. The Act also mandates PFAs to maintain books of account on all transactions relating to pension funds managed by them and provide customer service support to employees including access to employees account balances and statements on demand. In addition, PFAs pay retirement benefits to holders of Retirement Savings Accounts (RSAs), bear responsibility for all calculations in relation to retirement benefits and carry out other functions as may be directed by PenCom from time to time.

The RSA statement has some minimum information and disclosure requirements mandated by the Commission which includes amount contributed from inception to date; monthly employer and employee pension contributions; income earned (returns on Investment); and total RSA balance as at the reporting period. PFAs may also send RSA balances via text messages to RSA holders and the RSA holder also has the option of checking the performance of his/her RSA online or by physically visiting the nearest branch of his/her PFA to obtain a hard copy of the RSA statement.

In the event of a noted difference between the contributions credited into the RSA of an employee with the actual deductions made from salary, the employee should approach his PFA and employer for reconciliation. Where it is established that there is an under payment of the monthly contributions, the employer must remit the difference into the RSA of the employee.

It is important to note that the Contribution rates are a minimum of 10 percent by employer and 8 percent by employee, totalling 18 percent monthly. Employers are mandated to remit the monthly pension contributions of every worker on their payroll.  For employees whose salaries are not classified into basic, transport and housing allowances, the pension contributions should be based on the gross salary payable. Employers should take note of this and be guided accordingly. Employees should monitor and report erring employers to the Commission for action.

Read more at: https://www.thisdaylive.com/index.php/2022/09/26/why-pencom-pfas-prioritise-excellent-service-delivery/


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