FUG Pensions Clears Air On Union Homes Staff Legacy Scheme Impasse

Yemisi Izuora
fug pensions

The FUG Pensions has assured contributors in the Union Homes Legacy Scheme that the pension industry regulator, National Pension Commission (PenCom) is currently addressing all grey areas regarding issues with the scheme.

The company said the contributors should not exercise further fears as their contribution is in-tact but their demand would be met with express approval of PenCom as required by the pension Act.

Clarifying the situation with regard to agitation and fears of the contributors, Mrs. Ngozi Chuks-Okeke, general manager and head of investment FUG pensions, said that in 2010, FUG Pensions prospected the management of the existing staff pension scheme of Union Homes Savings and Loans Plc in line with the provisions of the Pension Reform Act 2004 and relevant regulations issued by the PenCom.

She explained that after series of meetings and correspondence, FUG Pensions was appointed one of the managers of the scheme and received the total sum of N448.8million in two tranches in 2011.

According to her, The management of the fund commenced immediately the first tranche was received and the fund management agreement was executed after receipt of the 2nd tranche.

It should be noted that the contribution of PenCom was sought and obtained in the preparation of the fund management agreement and same was prepared in line with the provisions of the Pension Reform Act. The execution of agreement by all parties was the second step towards the approval of the scheme.

Speaking further, Chuks-Okeke said that while the management of the fund was being diligently carried out in compliance with investment regulations released by the Commission, Union Homes was asked to produce series of documents, in addition to the executed fund management agreement, to process the approval of the scheme as a continuing pension scheme.

This, she stated was being handled mainly by Union Homes but the input of FUG Pensions was sought and obtained from time to time.

“Sometime in 2012 and 2013, Union Homes notified us that it intended to wind down the fund. The notification was forwarded to PenCom for its information and further instructions.

The request was declined and the management of the fund continued until January 2015 when we started receiving letters from beneficiaries to the effect that amounts due to them be credited to their personal accounts.

These letters got their strength from letters the beneficiaries received from Union Homes informing them that the Fund Managers had been instructed to credit their retirement savings accounts with stated amounts due to them from the fund” she said.

According to the general manager, Subsequently, on the 8th January 2015, we received a formal instruction from Union Homes to credit the individual RSAs based on PenCom’s approval dated 9th December 2014.

The said letter from PenCom, while approving “disbursement of accrued rights to individual RSAs of beneficiaries who do not have issues with Actuarial Valuation report as carried out by HR Nigeria Limited” equally requested Union Homes to provide a progress report on the “yet to be resolved pension arrears and pension for life right for existing pensioners in line with the rules of your scheme.

She stated further, that in view of the mounting pressure from beneficiaries of the fund, the company commenced the distribution of the funds to retirement savings accounts and pension fund administrators of beneficiaries.

“The transfers were both cash and assets available as at 26th January 2015. In the course of the transfers, it was observed that the realizable market value of the Government securities (FGN & State Bonds) was lower than the total value to be credited to individual RSAs, which was based on the value in the books. Consequently, PenCom was notified at a meeting of the managing

PFAs and a representative of Union Homes ex-staff at Abuja, we were directed to recall all the transfers to pension fund administrators (PFAs) meant to be credited to the retirement savings accounts of beneficiaries; thus re-establishing the fund.

At the same meeting, PenCom insisted that it was yet to receive the progress report requested in its letter conveying the conditional approval and therefore would not be able to proceed with the winding down of the fund. This position was conveyed to Union Homes and its former employees who are beneficiaries of the fund in question” she noted.

“After this meeting, there have been series of meetings with the management of Union Homes and the former staff on the matter in the office of Union Homes, at our office and the office of PenCom.

There has been assurance that the fund was intact but there was no way the disbursement could be done without the express and unconditional approval of PenCom. FUG Pensions has been treated to many disruptive protests by some of the fund beneficiaries and we have been working under the constant threat and fear of a complete lock down of the Company.

As a concerned and responsible corporate citizen, a further meeting of all parties had been requested of PenCom where everyone’s position will be put on the table and a way forward charted.

PenCom, on receipt of the letter and further to previous meetings invited Union Bank Plc, the parent company of Union Homes to a meeting at its office on the subject matter.

The outcome of the meeting was that Union Bank would review the matter and revert to the Commission with its own position on the matter. PenCom conveyed this outcome to FUG Pensions who subsequently informed all other parties. The Commission then asked that the request for an all parties meeting be put at abeyance until the receipt of Union Bank’s position.

We wish to state categorically that our duties as fund manager have been performed in strict compliance with the provisions of the Pension Reform Act and regulations as issued by the National Pension Commission. The fund value had increased by 50% (2011-2015).

We have not and cannot deliberately refuse or delay disbursement to beneficiaries as is being said by the beneficiaries. FUG Pensions cannot pay out any money from this fund without the express and unconditional approval of the National Pension Commission” Chuks-Okeke clarified.

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