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Business News of Tuesday, 8 June 2021

Source: economicconfidential.com

PenCom stop charges on artisans’ savings below N5m

Ehimeme Ohioma, Head of Surveillance Department, PenCom Ehimeme Ohioma, Head of Surveillance Department, PenCom

The National Pension Commission has ordered Pension Fund Administrators to stop charging any fee on micro pension funds under their management that are below N5m.

It disclosed this on Monday in a circular signed by the Head, Surveillance Department, PenCom, Ehimeme Ohioma, to all licensed PFAs titled ‘Circular on fee structure for the micro pension fund’.

It said, “In order to mitigate the concern of depletion of the MPF, the following additional conditions shall be followed: No fee shall be charged with the fund until management reach a threshold of N5m.

“Pension Fund Administrators shall not charge fees once the daily value of accounting unit of the fund falls below N1 to ensure that principal contributions are not eroded; and the commission shall not participate in micro pension fund fee regime until fund under management of a PFA attains the threshold of N4bn.”

PenCom said it observed the need to review the fee structure of the Micro Pension Fund in the light of the challenges in implementing the Micro Pension Plan by licensed pension fund operators.

It said the commission had undertaken extensive consultations on the appropriate fee structure of the MPF, which was expected to incentivise the pension operators to market the MPP and grow micro pension assets.

The commission said in the line with the above, it approved a new fee structure for the MPF.

It added that the fees to be charged on Fund V would be based on the adoption of the hybrid asset and income based fee structure.

According to PenCom, the circular took immediate effect and supersedes its circular of December 19, 2019 on fee structure for micro pension fund.

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