‘Don’t invest in unapproved instruments’

According to the acting Chief Executive Officer of the authority, Mr Laud A. K. Senanu, compliance inspection had revealed that some fund managers had made investments in unapproved instruments such as microfinance and non-bank financial institutions to the tune of GH¢32.1 million.

Mr Senanu gave the directive at a meeting with stakeholders in Accra on Thursday.

Compliance

Although the overall compliance level was encouraging within the industry, Mr Senanu said the findings included improper accounting on scheme funds which resulted in delay in crediting the returns on investment to respective contributors, unoperational schemes or schemes established with no beneficiaries signed on, as well as not communicating changes of directorships to the authority.

In addition, he said, conflict of interest issues, where the managing director of a trust company doubled as the managing director of a pension fund management company, came up, while some pension fund managers were also investing the funds in their parent or holding companies.

Temporary Pension Fund Account

Mr Senanu reiterated that the Social Security and National Insurance Trust (SSNIT) would continue to collect tier-two contributions from both employers with and those without schemes until employers were enrolled on schemes to avoid chaos.

However, he said the trust would be paid a fee for the collection.

Mr Senanu said the NPRA had set up a committee, comprising representatives from SSNIT and the Controller and Accountant-General’s Department, to reconcile collections with contributors and schemes.

After that, an independent auditor would be invited to audit the data before transfers of about GH¢1.14 billion being invested at the Bank of Ghana would be disbursed to corporate trustees, he added.

He was hopeful that the process would end in about a month for the transfers to be effected within the first quarter of the year.

Educational campaign

Mr Senanu said the authority would devote a better part of the year to educational campaigns for establishments to register schemes for formal and informal sectors.

The authority would also refer to its board the need to provide incentives for corporate trustees that spread their tentacles to the regions.

Past credit

He said the board of the NPRA was also studying for approval a formula for determining how much of the lump sum of persons below 55 years who contributed to the SSNIT had to be migrated onto the enhanced pensions regime with three-tier contributory levels.

The NPRA currently has 86 service providers, including companies with provisional approval status, comprising licensed corporate trustees, pension fund custodians (usually banks) and pension fund managers.

The stakeholders called on the NPRA to stick to its own timelines and deliver on its promises to move the industry forward.

Rev Daniel Ogbarmey-Tetteh, who represented Databank, said to give ample room for fund managers to get good returns for beneficiaries, the guidelines on investments should be streamlined, so that the hands of the fund managers would not be tied.

He explained that if care was not taken, beneficiaries would go home with only treasury bill returns, as the investment space was restrictive.