We’ll abide by PenCom’s decision on Union Homes – FUG Pensions

The management of First Unity Granville (FUG) Pensions Limited has said the law doesn’t permit it to terminate the investment account of Union Homes Savings and Loans in its custody except the National Pension Commission (PenCom) directs to do so.

Staff of Union Homes had severally blocked access to FUG office in Yaba, Lagos over what they claim was FUG’s refusal to terminate their investment fund account with it and credit their accounts with the proceeds.

Recall that in 2010, FUG Pensions prospected the management of the existing staff pension scheme of Union Homes Savings and Loans Plc in line with the provisions of the Pension Reform Act 2004 and relevant regulations issued by the National Pension Commission (PenCom). After series of meetings and correspondence, FUG Pensions was appointed one of the managers of the scheme and received N448.8 million in two tranches in 2011.The management of the fund commenced immediately the first tranche was received and the fund management agreement was executed after receipt of the 2nd tranche. But Union Homes later wrote to terminate the deal.

Explaining the issues with the contract, Mrs. Ngozi Chuks-Okeke, the Head, Investment/ General Manger, FUG Pensions said “sometime in 2012 and 2013, Union Homes notified us that it intended to wind down the fund. The notification was forwarded to PenCom for its information and further instructions. The request was declined and the management of the fund continued until January 2015 when we started receiving letters from beneficiaries to the effect that amounts due to them be credited to their personal accounts.

“These letters got their strength from letters the beneficiaries received from Union Homes informing them that the fund managers had been instructed to credit their retirement savings accounts with stated amounts due to them from the fund. Subsequently, on the 8th January 2015, we received a formal instruction from Union Homes to credit the individual RSAs based on PenCom’s approval dated 9th December 2014.

“The said letter from PenCom, while approving ‘disbursement of accrued rights to individual RSAs of beneficiaries who do not have issues with Actuarial Valuation report as carried out by HR Nigeria Limited’ equally requested Union Homes to provide a progress report on the “yet to be resolved pension arrears and pension for life right for existing pensioners in line with the rules of your scheme,” she explained further.

But “in view of the mounting pressure from beneficiaries of the fund, we commenced the distribution of the funds to retirement savings accounts and pension fund administrators of beneficiaries. The transfers were both cash and assets available as at 26th January 2015.

“In the course of the transfers, it was observed that the realizable market value of the government securities (FGN & State Bonds) was lower than the total value to be credited to individual RSAs, which was based on the value in the books. Consequently, PenCom was notified at a meeting of the managing PFAs and a representative of Union Homes’ ex-staff at Abuja.

We were directed to recall all the transfers to pension fund administrators (PFAs) meant to be credited to the retirement savings accounts of beneficiaries; thus re-establishing the fund. At the same meeting, PenCom insisted that it was yet to receive the progress report requested in its letter conveying the conditional approval and therefore would not be able to proceed with the winding down of the fund. This position was conveyed to Union Homes and its former employees who are beneficiaries of the fund in question.”

She said while FUG cannot terminate the fund without PenCom’s approval. FUG assured that the fund was intact but there was no way the disbursement could be done without the express and unconditional approval of PenCom.