A Bill for an Act to amend the Pension Reforms Act, 2004 seeking to compel Pension Fund Administrators (PFAs) to have an operational office in at least one state in each of the six geo-political zones of the federation is currently being debated on the floor of the National Assembly.
The Bill, sponsored by Aishatu Jibril Dukku from Nafada Federal Constituency in Gombe State, has passed first reading, according to information available to BusinessDay.
According to a document accessed by BusinessDay, the Bill seeks to amend the provisions of Section 50(1) of the Pension Reform Act, 2004 to, as a matter of priority to employees or beneficiaries of the retirement savings accounts, compel each and every licensed Pension Fund Administrator to have an operational office in at least one state in each of the six geo-political zones of the federation for easy access and effective service delivery.
The promoters say the Bill, which may be cited as the Pension Reform Act (Amendment) Bill, 2019, has become necessary as most PFAs are headquartered in Lagos and usually don’t have offices outside Abuja and maybe Port Harcourt.
However, the National Pension Commission (PenCom), the regulatory body for the pension industry, confirmed to BusinessDay that it is unaware of the amendment Bill which has scaled first reading.
Dapo Akisanya, managing director/CEO, AXA Mansard Pensions, responding to BusinessDay telephone enquiry, said he was not aware of any Bill seeking to amend the Pension Reform Act on branch opening.
He, however, said there was an existing regulation with regard to branching, which the National Pension Commission (PenCom) oversees.
Wale Odutola, managing director, ARM Pensions, who also responded via telephone, also said he was unaware of the Bill, but added that there is an existing regulation.
Meanwhile, PenCom in a circular issued on July 7, 2009 signed by M.Y. Datti, head, Surveillance Department, titled ‘Minimum Requirements for Opening of Branches by Pension Fund Administrators’, had directed PFAs as licensing requirement to have branches in certain locations in Nigeria.
“In order to ensure that all RSA holders have access to the services offered by Licensed Pension Fund Administrators (PFAs), the Commission has made the opening of two (2) branches in cities other than Abuja, Lagos, and Port-Harcourt a requirement before any PFA is granted licence,” the circular read.
This is in addition to having two service centres in states where they have up to 2,000 Funded Retirement Savings Account (RSA) holders.
PenCom also went further to explain what makes a service centre and a branch.
“Service centre is a sales office whose main purpose is marketing the PFA and receiving customer complaints. A service centre, therefore, could be a table in a banking hall or an employer’s premises,” it said.
A branch, on the other hand, is a fully equipped office dedicated to providing a wide variety of services that are available at the head office, it explained.
Again, in another circular issued on April 10, 2012 by PenCom to all PFAS, titled ‘Addendum to Circular on Requirements for PFAs with Funds Under Management of N100 billion & Above and New Requirements for Appointments to Board and Top Management Positions of All PFAs’, the Commission also specified branch requirement for the operators.
“That where a PFA has 10,000 funded RSAs or more, the PFA should open a branch in that State so as to meet the requirements specified in the Commission’s Circular on Branch Opening,” PenCom said.
It added that for 50,000 RSAs, the PFAs are to have branch and extra service centres.
The objective of the Pension Reform Act when it was passed in 2004 was to ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory, States and Local government or the Private Sector receives his retirement benefits as and when due and to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.