PenCom bans charges on micro pension

To avert the depletion of the micro pension fund, the National Pension Commission (PenCom) has mandated Pension Fund Administrators (PFAs) with the fund below N5 million to stop paying fee charges.

PenCom Head, Surveillance Department, Ehimeme Ohioma made this known in a circular to PFAs.

He stated that the agency took the step because of the challenges encountered in implementing the micro pension plan by pension fund operators.

According to him, no fee shall be charged until the funds under their management reached N5 million.

He said the PFAs should not charge fees once the daily value of the accounting unit of the fund fell below N1, noting that this was to ensure the principal contributions were not eroded.

He said: “The commission shall not participate in micro pension fund fee regime until funds under management of a PFA attains the threshold of N4 billion. 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.

“The commission has undertaken extensive consultations on the appropriate fee structure for the micro pension fund, which was expected to incentivise licensed operators to market the micro pension plan and grow micro pension assets, to achieve the objectives of the micro pension plan as outlined by the guideline.

"The circular takes immediate effect and supersedes its earlier circular issued on December 19, 2019, on the fee structure for a micro pension fund,” he added.

Meanwhile, the commission is today sensitising pension desk officers of the treasury-funded ministries, departments and agencies on its new enrolment application.

The commission has also automated its retirement verification due to the COVID-19 pandemic.

The Head Corporate Communication, PenCom, Mr Peter Aghahowa, said the workshop, which holds in Lagos, would be held also across the six geo-political zones of the country.

He said: “The COVID-19 pandemic has made it difficult for us to carry out retirement verification that we conduct six months before the retirement of Federal Government employees in the MDAs. The commission has adopted an automated process instead of the physical exercise in the conduct of the annual verification/enrolment exercise due to the COVID-19 pandemic. This is why we are sensitising pension desk officers on how to use the application.

“We believe that the automated process would ensure seamless conduct of the annual verification enrolment exercise. This new process has two options for the prospective retirees, namely self-assisted or the Pension Fund Administrator (PFA) assisted option. The self-assisted option entails a prospective retiree scanning original copies of all relevant documents required for the exercise and uploading these documents to the enrolment web portal located on the commission’s website, www.pencom.gov.ng. After carrying out this process, the retiree is required to visit his her PFA for the verification and validation of the submitted documents

“If a prospective retiree chooses the PFA-assisted option, he/she is required to initiate and conclude the Verification Enrolment process by visiting his/her PFA to verify and validate relevant original documents to enable the PFA to upload these documents to the commission’s enrolment portal on behalf of the prospective retiree.”