FG needs pension legacy funds to offset liabilities – Ikeazor
The slow response of some insurance companies to transfer all legacy funds and assets in their custody to the Pension Transitional Arrangement Directorate (PTAD) has delayed the settlement of the huge pension liabilities inherited by the directorate.
This was revealed by the Executive Secretary of the Directorate, Sharon Ikeazor, during the formal handing over of landed properties, fixed private holdings and cash as legacy funds by AIICO Insurance Limited in Lagos recently.
The federal government had on Wednesday released N2.7 trillion to offset liabilities, including N740 billion of outstanding pensions and promotional salary arrears (not discounted) as part of efforts to clear backlog of unpaid pensions.
Ikeazor said the recovery of legacy pension funds from the custody of insurance companies will hasten the clearance of inherited pension liabilities.
The Pension Reform Act, 2014 vested all Defined Benefit Scheme (DBS) pension assets, funds and liabilities in PTAD and following the consolidation of treasury funded parastatals’ pension by PTAD in August, 2015, the Federal Government discontinued the release of pension intervention funds to insurance companies.
This development meant that PTAD took over the administration of legacy pension funds and assets in the custody of insurance companies and boards of trustees of treasury funded parastatals and the directorate directed the concerned insurance companies to transfer the funds and assets in their custody.
Ikeazor revealed that so far, only 5 of the 15 insurance companies have complied with the transfer notices by transferring all or part of the outstanding funds in their custody to the directorate.
The companies that have complied include Leadway Assurance Limited, Custodian Life Assurance Limited, LASACO Assurance Plc, African Alliance Insurance Plc and NICON Insurance Plc.
“We would like to use this opportunity to call on other concerned insurance companies still holding unto legacy funds to transfer them to PTAD without further delay. The slow response of some of these insurance companies has unnecessarily delayed the settlement of the huge pension liabilities inherited by PTAD,” she said.
AIICO Insurance has complied with the notice and through a MoU signed by both parties, transferred the ownership of fixed assets, private equity holdings and cash.
“We shall, as a matter of urgency and on the strength of the MOU formally takeover, free from encumbrances, the properties, private equity holdings and cash which are listed and described under the schedule to the MOU at a value to be determined by both parties as legacy funds and assets in the custody of AIICO Insurance which it held in trust for pensioners,” the PTAD boss said.