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PFAs can swindle contributors’ money if…, Mokikan


EXECUTIVE Director, Human Resources, 7UP Bottling Company, Mr. Femi Mokikan, has said the only way Pension Fund Administrators, PFAs, can swindle money contributed into Contributory Pension Scheme, CPS, is if the National Pension Commission, PenCom, is not doing its supervisory responsibility effectively.

Mokikan in a interview with Pension and You, said however PenCom as presently constituted is effectively monitoring and supervising the PFA, the Pension Fund Custodians, PFCs, and other stakeholders in the sector.

According to him, “Every time I hear that the Pension Fund Administrator, PFA, is swindling money, I ask myself, how is it possible? Of course, I may not know enough but based on what we do here (7UP Bottling Company), each staff has a PFA, every PFA has a Pension Fund Custodian, PFC, the PFCs are very few, and they are backed by solid banks.

“The PFA has no access whatsoever to this money. The money goes to the PFC. They will write a cheque in favour of the PFC, then we will attach a list of the people that belong to the PFA that is using that PFC. We send a copy of the schedule to the PFA and another copy to the PFC. Once they confirm the cheque has arrived and cleared. I have my name in the PFC.

“Immediately they are supposed to credit my account and on a periodic basis, not as often as I want to, but I can access it myself. And when I have questions, I can ask my pensions and benefit manager. We have nothing to do with the PFC other than to pay this money. When you retire, we will give you a letter and the data of your PFA. Instead of waiting for them to ask us, we just put the necessary information in the letter.”

“I am not aware of anyone one of those people who have gone and come back to say that they were not paid. It may take a little time to go through the process because the people insist that unless the documentation is complete, they won’t pay anything. But for our own people, we do not have issues at all. There are two ways to collect your money; programmed withdrawal or annuity.

“For programmed withdrawal, you give them you account number and every period, they will be crediting you. The period may be a month three months or quarterly. The act is very stringent on where you can put money so it is the investment section of the act that will guide the PFCs.

“If PFAs are playing games with the money by saying now that the cheques is already with them, they then tell the PFC, transfer 10 million naira to a particular account and the PFC agrees to do that, it means that the National Pension Commission, PenCom , is not supervising correctly because the terms are so strict that anyone of them that does that, there is
a hammer (sanction). In my mind, they have done what they believe is reasonable and expect that it will work.”

He added that “if there is a gap, it will be in monitoring. But concerning the structure, I am still very proud of it. In my little interactions with PenCom, I believe they are responsible. It is not in many government agencies that you get the kind of cooperation that you get with them. Before the reform, we were running our pension with an insurance company, then after the reform, we said the money should be transferred. It took us a while to get the money transferred, almost every week I was in PenCom office, and they gave us all the cooperation.

“The insurance company used the money to buy a house and they had to sell the house, but we were in a hurry. What most of the insurance companies that were managing pensions did, was to establish PFAs. But we monitored everything and at the end of the day, the money was transferred. I will give the reform a pass mark.”

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