Secure registration of your organization’s Schemes

This is a major preliminary step in complying with the Act. Before registering your scheme with the NPRA, we would ensure that the Scheme Rules and Regulations, Trust Deed, etc. are duly in place.

We would also ensure that the NPRA is provided with changes if any in the particulars of your organization scheme after it has been duly registered.

Appoint pension fund managers, custodians and other service providers

We understand the significant roles to be played by the fund managers and custodians in order to ensure the success of your scheme and in enhancing your pension benefits.

Methodology for Appointing Service Providers
Service providers would be appointed through a process of competitive bidding. We shall undertake extensive due diligence on successful applicants to confirm their capabilities in performing their respective duties. Our choice of service providers will

also focus on companies with whom PAT has no association, be it directly or indirectly. Selection will be based on scores obtained through a defined selection criterion.

Appointment of Provident Fund Manager
PAT will delegate the actual investment of your funds to a professional fund manager. In appointing fund managers, our focus will be on investment banks licensed by SEC as an investment adviser and registered with the NPRA. We would also look out for investment banks that possess appropriate experience and qualifications to assess and advice on investment decisions.

We will maintain a valid investment management contract with the appointed fund manager. This will specify the responsibilities of the fund manager in relation to the investment of your organization’s funds. In order to enhance expected benefits to your scheme, we pledge our commitment to ensuring that fund managers properly invest funds taking into account, the investment policy and prescribed restrictions on investment. This is to help minimize investment risks while achieving the best returns to beneficiaries.

Pensions Alliance Trust (PAT) will ensure that the appointed fund manager performs the following duties;

  • Invest pension funds and assets in accordance with the provision of the Act;
  • Invest funds in different investments to minimize investment risks whilst achieving the best return within specific investment activities set by Pensions Alliance Trust;
  • Maintain books of account on transactions related to pension funds invested; submit records and reports as required by the NPRA.

Appointment of Custodian
Furthermore, PAT will appoint a custodian in accordance with eligibility requirements specified under the Act. We would also enter into a custodial agreement with the appointed custodian, detailing their functions with respect to assets of your Provident Fund Scheme. PAT would ensure that custodians exercise utmost care in holding pension funds or assets in trust for members.

PAT will ensure that the appointed custodian receives contributions remitted by the employer on our behalf; keeps pension fund and assets in trust for members; settles transactions and undertakes activities related to the administration of pension fund investments; conducts statistical analysis on the investments and returns on investments with respect to pension assets in their custody; and provides data and information to PAT and the NPRA.

Monitoring of Service Providers
We shall perform the relevant checks and balances to ensure that the proposed fund manager and custodian have adequate and appropriate human and capital resources to enable them perform their expected duties effectively.

Furthermore, PAT would ascertain that service providers have adequate control measures with respect to the investments of funds in order to protect the interest of members and to allow for a validation of compliance of investments undertaken with regulatory requirements.

PAT would take reasonable steps to ensure that the appointed service provider’s sticks to the terms specified in the service agreements. This is aimed at adhering to regulatory requirements and reporting schedules for your organization’s Provident Scheme.

As a means of measuring efficiency in the discharge of their roles, we would review the quality of service provided to your scheme by PAT and all other service providers.

Ensure a diversification of the funds to minimize investment risk

We would ensure that investments undertaken for your scheme is well diversified by asset class and security type. Thus, we would make sure that the selected fund manager maintains a portfolio strategy aimed at diversifying your portfolio. The expected benefit of diversification is to reduce both the downside and upside risk exposure potentials and allow for more consistent performance of your portfolio under a broad spectrum of economic conditions.

PAT has also instituted certain internal control measures to address issues relating to the following; timely receipt of contributions for the scheme; conflicts of interest problems; mediocre investment choices and performance; inaccurate data on contributors in relations to biological data, social security number, employer number, employee number, contributions attributable to employee and employer respectively; up-to-date and appropriate information about contributions to the scheme, investments undertaken and returns made.

Our internal control measures include processes for monitoring investments, scrutinizing the scheme’s assets and liabilities and ensuring that assets for your fund are maintained separately from those of PAT and other service providers.

Process transfer and payment requests as contained in the trust deed

PAT will facilitate all requests relating to transfers of funds for investments purposes and payments. We would ensure that all such requests are backed by relevant documentation.

PAT will also conduct periodic reconciliation with your organization, fund managers and custodians on all such transactions and address anomalies (if any) accordingly.

Maintain proper accounting records and a members’ register on all schemes

Poor standards of fund administration, in particular missing or incomplete member records have the potential of jeopardizing the benefits due to contributors with adverse cost implications for Provident schemes. In order to avoid this, PAT will maintain an ongoing dialogue with your organization to ensure that your organization provides us with up to date records on your contributors.

Our motivation for ensuring proper records is to facilitate the success of a number of very important events during the lifespan of your organization’s provident scheme. This includes the payment of benefits, portability (transfer of members between schemes), investment of member’s contributions, measures to minimize risk of investment, distribution of returns and winding up of schemes. This would enable us to explain in detail, transactions undertaken and the financial status of the scheme to all stakeholders.

Capabilities of our Fund Management Software
PAT has state of the art fund management software of international standards with application servers, database servers and backup servers to facilitate the collation and storage of up to date information on contributors. Our systems ran on the windows operating systems, have broadband internet connectivity access with a Virtual Private Network link. Security features in place to safeguard the security of data on your scheme include restricted access to authenticated users for the performance of various functions and an offsite server which mirrors the database on your organisation’s Provident Scheme at a remote Disaster Recovery Site.

It is worth noting that our fund administration software is capable of maintaining large volume of data on different schemes. PAT will maintain an up to date member’s register which spells out the names of contributors to the scheme, member’s date of birth, social security number and employer number. Other details that will be maintained include data on members joining and leaving your organisation Provident Scheme, expected date of retirement, beneficiaries and contact details. The data will include bio-data as well.

Our fund administration software is also capable of handling and processing data on contributing employees and employers, contributions received or otherwise, voluntary contributions, investments made and asset allocation for your scheme, gains made on investments and individual contributions at any point in time. The software is versatile and can be used to manage multiple pension funds with links to our front office and

back office processes. This is to facilitate the smooth flow of information between trustees, other service providers and your organisation’s Provident Scheme.

The software also allows for the maintenance of proper accounting records on contributions investments made for the scheme, returns on investments on securities constituting the portfolio, returns accruing to the entire portfolio and to contributors. The software is capable of tracking gaps in data to allow for reconciliation and possible rectification.

PAT will require your organization to provide us with a member data report which would address issues such as new entry and exit of members out of the scheme, change of contact details, etc, on a semi-annually basis to allow for effective reconciliation with our records. The software allows for portability.

Prepare and lodge annual audited financial statements, scheme and investment reports and other relevant or regulatory reports

Our fund administration software has flexible reporting format in place to allow for the generation of customized reports on your scheme. These reports are paramount as they allow for a monitoring of the completeness of records on contributors. Indicators to be included in these reports include contributions received or otherwise, asset allocation, returns made on assets constituting the investment portfolio.

Reporting to Regulators
PAT will ensure the accuracy and timely submission of statements on investments,

returns and reports required by the NPRA. Reports to be submitted to the NPRA include a profit and loss account and a balance sheet that reflects the financial position on your

scheme at the close of the accounting period.

Reporting to your organization / Contributors
PAT will also provide every member of the scheme with a quarterly valuation statement, indicating the member's monthly and total contributions, total contributions paid by the employer in respect of each employee, returns on investments, value of accrued benefits at the end of the financial year. This is to allow for a tracking of contributions and assessment of returns.

Discharge all other duties required of trustees

We also hold semi-annual stake-holder meetings with the organization. This is to allow for an in-depth discussion of all outstanding issues (for example, the investment policy statement being maintained for the schemes, complaints received from contributors and other service providers) pertaining to the prudent management of the Provident Fund.

Look deep into nature, and then you will understand everything better.

- Albert Einstein

subscribe to our weekly newsletter