PenCom stops gift giving because ‘it was getting out of hand’
By Jeph Ajobaju, Chief Copy Editor
Gift giving by Pension Funds Administrators (PFAs) to retain existing Retirement Savings Account (RSA) holders or lure new ones have been banned the National Pension Commission (PenCom) because of abuse leading to corruption.
Before the ban, PFAs often sent birthday gifts to workers nearing retirement to woo them to stay even till after retirement and sent corporate gifts to RSA holders and clients at the end of the year.
PFAs also used retirement forums to give gifts to retirees.
After PenCom opened the window of transfer which allows workers to change PFAs, the regulator noticed an alarming increase in the rate at which PFAs sent gifts to RSA holders, including young ones.
The aim of PFAs was to discourage recipients from transferring their pension to competitors.
“Congratulations on your upcoming birthday celebration!” Stanbic IBTC Pension Managers said in an mail to its RSA holders, per reporting by The PUNCH.
“This is to inform you that we are in receipt of a new directive from the National Pension Commission, advising the immediate discontinuation of the distribution of gifts by all Pension Fund Administrators to Retirement Savings Account holders.
“As a result, we are engaging the Commission for clarity on the instruction and once confirmation is received to proceed, your gift will be delivered to your preferred address.
“We sincerely apologise for any inconvenience which may result from this new development. We would, however, like to reassure you of the high value we place on our clients.
“Our commitment to providing you with excellent services remain unwavering, while our pledge to client obsession remains unchanged.”
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Gifting things getting out hand
PenCom spokesperson Abdulqadir Dahiru said: “The Commission released a circular stopping all these ‘gifting things’ because it was getting out of hand and we were getting a lot of complaints so the Commission had to put a stop to it. With the transfer window, it was becoming alarming.”
He explained PFAs do not make much except fees charged on funds they manage because the funds are in the custody of the Pension Fund Custodians.
“When you start spending on all these, where is that money going to come out from? We don’t want unhealthy competition in our industry. It is an attempt to sanitise the industry.”
