The Minister of Finance, Mrs. Kemi Adeosun, has brokered a resolution of the dispute between the National Pension Commission and the National Insurance Commission over a circular issued by PenCom directing life insurance companies to transfer their annuity asset holdings to Pension Fund Custodians.
The intervention of the minister was confirmed in a statement by the Director of Information, Ministry of Finance, Mr. Salisu Dambatta.
There has been a disagreement between PenCom and NAICOM over a recent circular by the former asking life insurance companies to transfer about N145.05bn in annuity funds in their possession to the PFCs.
PenCom had stated that the action became necessary due to the unethical and sometimes illegal dealings of insurers with the annuity funds of their customers.
It claimed that some insurance operators were allowing retirees to use their annuity funds as collateral for loans, which it said negated the pension law.
As such, it explained that keeping all pension funds in the custody of the PFCs as specified by law would prevent unethical practices.
But at a meeting convened by the Finance minister between the Director-General of PenCom, Mrs. Chinelo Anohu-Amazu; and the Chief Executive Officer of NAICOM, Alhaji Mohammed Kari, both parties agreed to issue a joint circular by Tuesday, March 21, 2017 that would supersede all previous circulars issued by the two regulatory agencies on the annuity matter.
The statement read in part, “The dispute was fanned by a circular issued by PenCom in November last year directing life insurers to transfer custody of their annuity assets to the PFCs and inform the commission accordingly. The insurers were also required by the circular to suspend approving new requests for annuity pending the transfer of the assets to the PFCs.
“The minister noted that the Federal Ministry of Finance had received several complaints from pensioners in relation to the outstanding dispute. She drew the attention of both parties to the adverse impact the current situation is having on pensioners and reiterated that a prompt resolution of the matter is paramount.”
