The Pension Transitional Arrangement Directorate (PTAD) a body responsible for pension administration of the Defined Benefit Scheme (DBS) is targeting an estimated N25 billion in refunds from insurance companies managing legacy funds.
The directorate had in compliance to the Pension Reform Act 2014 issued demand notices to 15 insurance companies managing legacy funds of ministries, agencies and parastatals of government, under the DBS to return them.
Sharon Ikeazor, executive secretary, PITAD told BusinessDay in an exclusive interview, that out of the N25 billion so far identified, N6.5 billion has been recovered with assets worth N13 billion.
Ikeazor said the directorate has approached the insurance industry regulator, the National Insurance Commission (NAICOM) to assist the agency enforce compliance from those that were yet to refund theirs.
“A few companies have complied with the directive and we have gone to NAICOM to report those that are not complying and if that fails, we shall go to the Economic and Financial Crimes Commission (EFCC).
“It is not fair that they will transfer the liability to government and keep the assets. Government pays to service these liabilities monthly, and another person is keeping the asset, that is not fair, Ikeazor said.
From the last count, five insurance companies have refunded theirs, they include Leadway Assurance Limited, Custodian Life Assurance Limited, LASACO Assurance Plc, African Alliance Insurance and NICON Insurance and AIICO Insurance Plc.
Ikeazor further said it is in the fulfilment of its mandate under the Act, that PTAD has taken over the administration of Legacy Pension Funds and assets in the custody of insurance companies and Boards of Trustees of treasury funded parastatals.”
Christianah Adebote, divisional manager, PITAD speaking when LASACO transferred its N1.063 billion meant for pensions of six Federal Government agencies, said “the Directorate, last year issued demand notices on the insurance companies holding legacy funds meant for payment of pensioners under the Defined Benefit Scheme (DBS) to transfer outstanding funds into “our dedicated e-Collection account with the Central Bank of Nigeria (CBN)’’
She explained that the Pensions Reform Act (PRA) 2014 vested all pension assets, funds and liabilities in PTAD and warned that it has become imperative for other concerned companies still holding onto the legacy funds to transfer them to PTAD without further delay.
She also noted that the intention of the Federal Government’s request for the release of these funds is to grow them for the prompt payment of pensions to pensioners.
Yetunde Ilori, director-general, Nigerian Insurers Association (NIA) responding to questions on impact of the development to insurance industry, said “We have not lost anything if you look at it very well, because it is the liability we are carrying that we are transferring back with the matching assets.”
She said that government actually paid insurers these monies and when they needed it, “we have no option but to return it”, she stated.
Ilori assured that it was not going to hurt the industry so much.
PTAD was established to address the numerous pensioners’ complaints that border on issues such as non-payment of monthly pension, shortpayment of pension and gratuity, removal of name on pension payment voucher, non-payment of harmonised pension arrears, and irregular payment of federal pensions and non receipt of pension after retirement.
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