The Director-General, National Pension Commission, Mr. Muhammad Ahmad, has said that the number of pension operators reduced from 37 to 35 and no new licence was issued in 2010.He attributed the reason for the reduction to the merger approved for two pension operators, while another operator returned its operating licence to the commission.He said, "There was no issuance of new licence in 2010. However, PenCom approved the business combination between First Alliance Pensions and Benefits Limited and ARM Pension Managers PFA."Standard Alliance Pension Managers Limited, he noted, voluntarily returned its licence to PenCom and the pension assets under its management were taken over by Pension Alliance Limited. Similarly, he added that the pension assets under the custody of Oceanic Pension Funds Custodian were transferred to Diamond PFC, following the voluntary exit of Oceanic PFC from the PFC business. This, he added, made the total number of licensed operators to decrease from 37 in 2009 to 35 in 2010. Ahmad said that PenComs surveillance department carried out both on-site and off-site examinations of all the licensed pension operators. He noted that the risk-based examination covered an assessment of the financial viability and management of the companies as well as pension and benefit administration, investment activities and fund accounting. The PenCom boss identified the collection of pension contribution as a major challenge observed when it conducted a routine examination on the 34 licensed operators.He said, "However, challenges remained in the collection of pension contribution, performance measurement, as well as fund accounting."Ahmad said that the method of examination was risk based and involved the assessment of the financial viability, operational efficiency and governance/management structure of the operators.According to him, the Pension Fund Custodian examination covered the core custody functions of collection, safekeeping, settlement, and corporate action.Other areas examined, he added, were fund accounting, performance measurement and compliance.The PenCom boss said that the examination of the PFAs focused on pension and benefit administration, investment activities and fund accounting.He said, "The examination revealed that the PFCs had standardised the processes of safekeeping, settlement, and corporate action while in the case of the PFAs there had been marked improvements in pension and benefit administration, despite the increase in the number of employees enrolling and retiring from the Contributory Pension Scheme.In line with the risk-based approach of PenCom, he said that commitments to remedial actions were obtained from the operators with timelines for implementation.He added that PenCom embarked on a number of initiatives, which included the setting up of committees for the design of a contribution payment portal and the implementation of the adoption of International Financial Reporting Standards by operators.
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