PENSION FUND ADMINISTRATORS
A Pension Fund Administrators in Nigeria are licensed to manage Pension Fund Assets on behalf of pension fund contributors. According to the Pension Commission (Pencom) “Pension Fund Administrators (PFAs) have been duly licensed to open Retirement Savings Accounts for employees, invest and manage the pension funds in a manner as the Commission may from time to time prescribe, maintain books of accounts on all transactions relating to the pension funds managed by it, provide regular information to the employees or beneficiaries and pay retirement benefits to employees in accordance with the provisions of the Pension Reform Act 2004”.
In other words, PFA’s manage your pension contributions on your behalf. They invest the monies in equities and other investment securities and assets to ensure that you have increased value for your contributions when you retire. PFA’s also issue you monthly reports that shows you the performance of your pension contributions periodically.
PENSION FUND CUSTODIANS
Pension Fund Custodians on the other hand have the responsibility of warehousing pension fund assets. Whenever your organization deducts money from your salary as pension, the amount deducted is deposited with the PFC’s. The PFC’s now notify the PFA’s that money has been deposited following which the PFA’s can now access it for investments.
The Pension Commission comments as follows;
The PFAs shall not be allowed to hold the pension funds assets. The employer sends the contributions directly to the Custodian, who notifies the PFA of the receipt of the contribution and the PFA subsequently credits the retirement savings account of the employee. The Custodian will execute transactions and undertake activities relating to the administration of pension fund investments upon instructions by the PFA. The custodian shall hold pension fund assets on trust for its clients.
PFC’s are Financial Institutions that must have a minimum balance sheet of not less that ₦125billion. These are the current list of PFC’s
- 1. Diamond Pension Fund Custodian Limited
- 2. First Pension Custodian Nigeria Limited
- 3. UBA Pensions Custodian Limited
- 4. Zenith Pensions Custodian Limited
DIFFERENCE BETWEEN A PENSION FUND ADMINISTRATOR (PFA) AND A PENSION FUND CUSTODIAN (PFC)? | Ugometrics https://t.co/dqyfa2iplg #UGOMETRICS
DIFFERENCE BETWEEN A PENSION FUND ADMINISTRATOR (PFA) AND A PENSION FUND CUSTODIAN (PFC) https://t.co/SKyDv9jWWL #UGOMETRICSBLOGWEEKENDRECAP
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So the PFA’s are never actually in possession of the funds?