Unanticipated policy changes, especially those that affect financial institutions, often trigger reactions from customers.
This can be expected in the Nigerian business environment where the government has let loose a binge of regulations on the operation of the financial sector.
The orders are a hangover from suspicion that the former federal administration slackened on the supervision of financial institutions.
However, financial institutions that know their onions take potential clients’ reaction into calculation and do not want a slur on their popularity and cherished values.
Two major brands – Zenith Pensions Custodian (ZPC), a subsidiary of Zenith Bank; and TrustFund, a pension fund administrator – held interactive sessions with stakeholders last week.
Employers, pension contributors of employees under the Pension Reform Act, were briefed on the administration and management of pension funds and compliance with regulation.
There were representatives from the Pension Commission (PenCom) and pension fund administrators (PFAs).
The objective of the forum was to
• Sensitise employers on modalities for the remittance of pension contributions and other issues about the individual contributions of the employer.
• Educate employers on their responsibilities in accordance with the Pension Reform Act.
• Minimise unreconciled contributions and transitional contributory funds.
TrustFund urged employers to follow requirements in full to make the administration of retirees’ pension less cumbersome.
It expressed regret that employers commit errors which cause problems for retirement savings account holders.
The errors include
• Inaccurate information to PFAs about employees.
• Failure to update information (for example, when an employee changes status; say, from single to married).
• Duplication of information.
• Wrong listing of pension fund contributors.
• Amount contributed is higher than amount remitted.
• Under-contribution which results in non-payment during withdrawal.
• Miss-labelled period (for example, January instead of February).
• Prepayment without schedules whereby retirees are paid before schedules are transmitted to the PFA.
TrustFund Collection Officer, Philips Kehinde, advised employers to ensure that every employee, old and new, maintains a retirement savings account in his or her name with a PFA of his or her choice, as stated in Section 11(1) of the Pension Reform Act.
He urged them to deduct at source the monthly contribution of the employee not later than seven working days from the day he is paid salary, and to remit an amount comprising the employee’s contribution to the pension fund custodian (PFC) specified by the employee’s PFA, as prescribed in (S.11(3)(b) of the Act.
Osawaru Ekpe of ZPC stressed the need for accurate filling of retirees’ information to ensure seamless service.
He said ZPC aims “to create a brand of first choice in pension custody through the provision of world class service by investing in the best people and technology.”
He explained that lodgement of pension fund is executed at Zenith Bank and its management is in the class of Duetsche Bank, Suisse Bank, and other financial house global brands.
Information required in filling the deposit slip include the telephone number of company’s pension desk officer for direct contact, type of contribution (mandatory or voluntary), employer code, period covered, company’s name (in full and written same way each time), depositor’s name, amount in words and figure.
Ekpe said ZPC operates an electronic pension contribution and collection system (EPCCOS) which enables the employer to upload its pension contribution schedule and obtain a unique payment ID used in making payment online or through a bank.
“As soon as the payment is made, the schedule is available for processing. Both the PFA and PFC have access to this platform and can see when payment is made for any schedule uploaded,” he explained.
He said cheques can be returned for reasons such as insufficient fund, invalid date, drawer’s attention is required, drawer’s confirmation is needed, irregular signature, irregular mandate (coming from discordant sources).
ZPC was established as a single purpose vehicle to carry on the business of business custody in line with the Pension Reform Act.
It seeks to create and sustain world class custodial service to clients by investing in the best people and technology.
Its values include teamwork, trust, and open communication.