Trustfund lauds introduction of pension multi-fund structure
The introduction of multi-fund structure has widened investment opportunities in the pension industry and offer investment freedom to workers, Trustfund Pensions Limited said.
Speaking at the 2018 edition of employers’ interactive session in Abuja, the Managing Director of Trustfund Pensions, Mrs Helen Da-Souza, who was represented by the Chief Compliance Officer of Trustfund, Rachael Osa Obi, explained that the new structure allows higher risk taking that will deliver greater investment returns to pension contributors.
Her explanation: “The multi-fund structure is new introduction in the industry. The essence of multi-fund structure is to categorise funds according to age and risk appetite.
“There are four categories of multi-fund structure. Category four is for retirees’ investments that do not involve a lot of risks because of the age of the people in this category. Fund three is for those who are fifty and above while fund two is the default fund that warehouses all the workers. But fund one is for younger workers who are just entering the labour force and have high-risk appetite. The fund one will yield more investment returns because of the kind of investment we are allowed to do. To be in fund one is not automatic. Workers have to apply to their Pension Fund Administrator (PFA) to move. The category of people that can be in fund one are those who are below 50.
“With this multi-fund approach, the PFAs are allowed to play in more sectors of the economy. Just as the risks are high, so is the return on investment. This gives freedom to pension contributors to decide where they want to invest.”She also decried lack of due diligence by Pension Desk Officers (PDOs) whose lackadaisical attitude often leads to gaps in fund remittances.
“That is the reason we have brought the Pension Desk Officers (PDOs) together because they are the ones responsible for remittances. What has been happening over the years is a situation where people are not just diligent enough to do what is needful to be sure that money can be credited to Retirement Saving Account (RSA) holders. Once the Personal Identification Number of the account holders is not correct or placed against another person’s name, the money goes into a suspense account. It now behoves on the Custodian and PFA to in search of those that fall in this category. Even after correcting the mistake, it will still come back again in subsequent months. This is the main challenge the PFAs are still facing more than 10 years we have been operating this system,” she said.
She, however quick to point out that the Electronic Payment Contributory Collection System (EPCCOS), which is a system put in place by the Nigerian Interbank Settlement System (NIBSS) to disallow payment if PIN is incorrect and contribution below or above the expected figure would fix remittance issue.
The Trustfund boss urged employers to ensure remittance of deducted funds to avoid sanctions by the National Pension Commission (Pencom) saying, “employers of labour are expected to remit pension funds seven days after payment of salary. As long as employers are not complying with this provision, whatever that is done after is an infraction against the law. We have a procedure in place where we communicate infraction to Pencom. The commission that has the responsibility of going after recalcitrant employers would take it from there.”