The incapability of nine insurance companies to pay roughly N3 billion legacy pension funds in their possession is scuttling effort by the federal government of Nigeria to offset its huge pension liabilities under the old pension scheme.
To this effect, retirees under the Defined Benefits Scheme (DBS) may find it difficult getting their pension entitlements as and when due.
Legacy Funds are pension funds of federal government parastatals kept in the custody of insurance firms before the enactment of the Pension Reforms Act (PRA) 2004.
15 insurance companies owing about N23.5 billion legacy funds were directed by the federal government to remit the funds to Pension Transitional Arrangement Directorate (PTAD), but six of them seem to have transferred most of the funds in their possession, with the remaining insurers yet to remit theirs to the agency.
It was learnt that, while NICON, Leadway Assurance, AIICO, Custodian Life Assurance Limited, LASACO Assurance Plc and African Alliance Insurance Plc have paid a cumulative N20.5 billion legacy fund they owe, the likes of Goldlink Insurance, Standard Alliance Life Assurance, Industrial and General Insurance (IGI PLC), and Nigerian Life and Provident Company, among others, are still foot-dragging to pay a cumulative N3 billion they are owing.
NICON, it was also gathered, has handed over certificates of occupancy of its 28 properties located all over the country tentatively valued at N13 billion in lieu of cash payments under legacy funds to PTAD.
AIICO has remitted N1.5 billion legacy fund to the agency, even as LASACO Assurance equally paid about N1.5 billion to the Directorate.
Leadway Assurance has paid N330.2 million, while Custodian and Allied Insurance paid N148 million.
The Executive Secretary of PTAD, Mrs Sharon Ikeazor, said refusal of the remaining companies to pay what they owe is affecting the ability of the federal government to offset its pension liabilities.
She said, “We will 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”.
Source also revealed that some of the properties of insurance companies taken over by PTAD are still yet to get buyers, especially, as intending buyers are underpricing the assets.
“This is making it difficult for this agency to accrue money from the sale of these assets to offset the pension liabilities federal government owes under the old scheme”.
The Pension Reform Act, 2014 vests 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.
To this end, 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.
The directorate directed the concerned insurance companies to transfer the funds and assets in their custody.
Source – Leadership