FRAMEWORK FOR RESOLUTION OF FAILING OPERATORS IN THE NIGERIAN PENSION INDUSTRY
Framework · Finance
A Framework identifies and resolves failing pension operators to safeguard contributors' savings. It targets distressed pension fund administrators, regulatory bodies, and contributors. This ensures continuity in pension management with minimal disruption.
FRAMEWORK FOR RESOLUTION OF FAILING OPERATORS IN THE NIGERIAN PENSION INDUSTRY
What Is This Policy?
PenCom's framework for identifying, managing, and resolving PFAs or PFCs that are in financial distress or failing, to protect pension contributors from loss of their savings.
Who Does It Target?
Licensed PFAs and PFCs facing financial distress PenCom resolution team NDIC and CBN as financial sector resolution partners Pension contributors with funds in affected operators
What Does It Aim to Achieve?
Ensure that when a pension operator fails, contributors' accumulated savings are protected and continuity of pension management is maintained with minimal disruption.
Key Features
Early Warning System: PenCom monitors financial indicators of PFAs and PFCs to identify emerging distress early. Corrective Action: PenCom may require a distressed operator to submit a remediation plan and implement corrective measures. Bridge Operator: In serious cases, PenCom may appoint a bridge PFA to take over management of the failing operator's RSA funds. Winding Down: For operators that cannot be rescued, PenCom manages an orderly wind-down and transfer of RSAs to a viable PFA.
Current Status
Rollout Stage: Active Coverage: All PenCom-licensed pension operators Beneficiaries: Pension contributors; pension system stability Funding: PenCom operational budget; industry resolution fund
How to Access
Contributors: PenCom communicates directly with contributors if their PFA is subject to resolution action Contributors RSAs are transferred to a new PFA without action required by the contributor in most cases Application method: PenCom initiates resolution; contributors do not apply.
Important Terms
RSA funds are held with custodians and are segregated from PFA own assets, providing protection against PFA insolvency Contributors should verify their RSA balance regularly through their PFA statements Transfer to a new PFA does not affect the value of accumulated pension savings
Official Resources
Website: https://www.pencom.gov.ng Contact: National Pension Commission (PenCom)
Legal Framework
Issued under the regulatory powers of the National Pension Commission (PenCom) pursuant to the Pension Reform Act 2014 and the National Pension Commission Act. Operates alongside the Banks and Other Financial Institutions Act (BOFIA) 2020 (for PFC resolution), the Companies and Allied Matters Act (CAMA) 2020 (for winding up), and the Nigeria Deposit Insurance Corporation Act. Aligns with IOPS and OECD guidelines on pension fund supervision and resolution.