Pension Directorate Auditing Standard Alliance Life, Unic, Others For N11bn Retirees Fund

By Edet Udoh

In its determined efforts to recover all obligations under the Legacy Fund, Pension Transitional Arrangement Directorate (PTAD) has begun audit of assets surrendered by five insurers to determine whether their values equate the N11 billions owed by the firms, InsideBusiness Online investigation has revealed.

The five companies allegedly owing N11 billion Legacy funds are Goldlink Insurance Plc, Standard Alliance Life Assurance, Industrial and General Insurance (IGI), Unic Insurance Plc  and Nigerian Life and Provident Company.

Sources at PTAD told InsideBusiness Online that forensic auditors from the agency would also look into the books of the insurance companies in a bid to authenticate the true position of the transactions and come up with the true balance of funds with each of the companies.

This is to resolve the raging controversies that what they are being asked to pay is higher than what they are owing.

Legacy funds are pension funds of federal government parastatals that were hitherto managed by insurance firms prior to the enactment of the Pension Reforms Act (PRA) 2004.

Findings show about 15 insurance companies owed a total of N27 billion of legacy funds.

On request for the funds, some insurance companies opted to forfeit their properties in lieu of what was in their custody; while others returned both cash and properties to make up for their obligations.

Ten underwriters including Leadway Assurance, AIICO Insurance PLC, Custodian Life Assurance Limited, LASACO Assurance Plc, NICON Insurance, and African Alliance Insurance Plc had transferred over N16 billion in cash and properties to PTAD.

Findings further show that NICON Insurance handed over certificates of occupancy on its 28 properties located all over the country which it valued at N13 billion in lieu of cash payments under Legacy funds to PTAD. AIICO Insurance returned N1.5 billion legacy fund to the Directorate, while LASACO returned N1.5 billion.

Leadway Assurance paid N330.2 million and Custodian and Allied Insurance returned N148 million.

Speaking on this development in Abuja, the Executive Secretary, PTAD, Sharon Ikeazor, said the cash and assets totalling over N16 billion was the recovery so far on the inherited pension liabilities of all the Federal parastatals under the Defined Benefit Scheme.

Breakdown of the N16 billion shows N6.9 billion was the cash component and is currently lodged with the Central Bank of Nigeria (CBN), while the balance of N9.1 billion was in form of properties that had been sent to the Ministry of Works for valuation.

In addition, 28 properties including office complexes and residential apartments had been recovered from the underwriters by PTAD.

Currently, there is an alleged outstanding N11 billion in pension assets with underwriting firms.

Ikeazor said PTAD would undertake legitimate processes to recover the funds from all insurance companies that had not complied with the agreed final demand notice of October 2017.

The funds is needed to pay pensioners under the old scheme as and when due.

It would be recalled that PTAD in November 2018 won a legal battle against Goldlink Insurance PLC when Justice Ibrahim Buba of the Federal High Court Lagos ruled that the insurance company pay up the N1.2 billion legacy fund in its possession to the Directorate as well as 10 per cent interest per annum until the judgment sum is settled.

The judgement was obtained following the failure of the initial out-of-court settlement anchored by the National Insurance Commission (NAICOM) between PTAD and Goldlink Insurance Plc.

PTAD then had requested from Goldlink Insurance Plc, relevant information on its ongoing recapitalization process including the prospectus and other relevant documentations, manifestly specifying assets and liabilities to ensure that the interest of PTAD is indisputably secured in their future plans.

PTAD also demanded that Goldlink Insurance Plc execute a Memorandum of Understanding (MoU) with the Directorate to be endorsed by NAICOM as a commitment to repay the outstanding Legacy Funds and Assets over a period not exceeding 12 months after its recapitalization.

However, the failure of Goldlink Insurance to take advantage of the arrangements necessitated the intervention of the court.

The Pension Reform Act, 2014 vested all Defined Benefit Scheme (DBS) pension assets, funds and liabilities in PTAD.

Upon the consolidation of treasury funded parastatals’ pension by PTAD in August, 2015 the Federal Government discontinued the release of pension funds to insurance companies to fully give the administration of legacy pension funds and assets in the custody of insurance companies and boards of trustees of treasury funded parastatals to PTAD.