NPRA directs trustees to withdraw investments

The National Pension Regulatory Authority (NPRA) has directed licensed corporate trustees, to disinvest all portfolios in unpermitted instruments after maturity.

Mr Laud Senanu, Acting Chief Executive Officer of NPRA, who gave the directive at a meeting with service providers, said more than GH¢32.1 million investments were made by corporate trustees into non-permitted instruments such as in microfinance institutions and non-bank financial institutions.

NPRA currently has 86 service providers made up of 25 licensed corporate trustees, 15 registered pension fund custodians and 46 registered pension fund managers.

“We are monitoring this activity closely and are aware that there are still some corporate trustees, who have disregarded the directives of the NPRA,” he said.

He told the service providers that they could be punished in line with the penalties spelt out in the law for every infraction.

Mr Senanu, however, said overall the compliance level is encouraging, but urged the service providers to deal with the challenges of inadequate training, lack of appropriate pension management software and information, communication and technology infrastructure to facilitate their operations.

“You are encouraged to review your performance over the period of engagement with the NPRA and align your activities to aim at reasonable and remarkable level of compliance as a way forward,” he said.

Mr Senanu urged pension fund Managers and pension fund custodians to continue to work efficiently with their corporate trustees and be guided by the guidelines which streamlines their operations to ensure full compliance with the NPRA.

“Henceforth, performance, reporting and compliance level will contribute in the overall assessment and renewal of services providers licensed or registered with the NPRA,” he said.

On schemes with overlapping membership, which has delayed the operations of the 2nd Tier Occupational Pension Scheme for government workers, Mr Senanu said the matter is being pursued vigorously with the government and expressed hope of an early resolution.

Currently, below 6,000 employers out of about 45,000 establishments per Social Security and National Insurance Trust (SSNIT) records have been enrolled.

Touching on the transfer of funds from the Temporary Pension Fund Account (TPFA), Mr Senanu said a TPFA Reconciliation committee had been setup by the Authority, whose membership is made up of representatives from NPRA, SSNIT, Controller and Accountant General Department and the Fund Administrator.

The members are to resolve all reconciliation issues with the TPFA recommend and coordinate a roadmap for the transfer of funds to approved trustees.

The committee’s report, he said, is expected to be ready by the first week of February, 2014 and the processes exhausted by the end of the first quarter.

Mr Senanu said a roadmap to enable SSNIT collect Tier-2 Contributions from Employers without Schemes is also being implemented.

He said a Public Notice for SSNIT to continue the collection into the TPFA has been issued to all SSNIT Branches and published in the print media and on the NPRA website to avoid any chaos.

SSNIT would continue to collect the monthly contributions from employers without schemes, until employers are enrolled.

However, the Authority had submitted its requirements to SSNIT about the extension and management of collection of Tier-2 contributions and in consultation with SSNIT on the subject to act as a collecting institution for a fee.

Mr Senanu said the authority is in the process of compiling data on all trustee details, schemes, details of fund managers, fund custodians, employers enrolled including; employee strength and their respective employee details (bio-data).

He encouraged corporate trustees to demonstrate commitment to move out of Accra, in order to improve their scheme membership and to contribute to the successful implementation of the scheme across the country.

Mr Senanu said the authority is in discussion to identify and provide incentives for corporate trustees who would be willing to cover other regions apart from Greater Accra.