Of the 104 companies with pension plans less than 10% meet the requirements for registration, and stakeholders were encouraged at a seminar yesterday to abide by the requirements governing these funds.
The seminar, held at the Demerara Mutual Life Group of Companies conference room, was hosted by the Office of the Insurance Commissioner(OIC) on Pension Plan Regulatory Framework.
Insurance Commissioner Maria van Beek told Stabroek Business prior to the seminar that its main goals were to increase the level of awareness among stakeholders in regards to the reporting requirements under the law so as to encourage compliance.
Insurance companies, plan managers, corporate trustees of Pension Plans(Trust Company Guyana and Hand in Hand Trust Co.,) attended the seminar. van Beek advised them that pension plans must be registered, must submit information on the plans to the commission, including the names and addresses of managers, and should be governed under a trust deed.
Among other requirements, the plans' financial statements must be audited by an auditor approved by the commission. Some plans also require actuarial reporting.
Less than 15% of the plans have submitted audited accounts and the commissioner noted that plans which did not abide by the legislation cannot continue to operate in Guyana.
For example, only 12 out of 104 plans have submitted audited financial statements; of the 31 actuarial reports submitted for the relevant plans, only 8 were done in the last 3 years and only 40 of the plans (38%) have submitted a trust deed.
However, some companies, she noted, may not have the resources for these initiatives.
"These would have to take a serious look at whether their plan is affordable in the medium term," said van Beek and she suggested "that small plans get together to pool their limited resources."
Prior to the Insurance Act, which came into effect in December 2002, assets were rarely audited and many funds were incorporated in the company's accounts. Now, a mandatory trust deed establishes the trustees as the key body that oversees the Pension Plan and this is governed by Trust Laws which increase the security to pension plan members.
The role of the OCI is to maintain a register of pension plans; inspect records; enforce the laws by taking managers to court if a breach of trust is suspected; gain permission for amendments among others.
At the seminar it was stated that individuals designated as trustees are still unregulated but corporate trustees are regulated by the Bank of Guyana. Trustees must act in the best interest of the Trust and be prudent, be a good record keeper, a resident of Guyana and capable among other acceptable practices, according to Selicia Douglas, OCI's legal officer. Presentations were also made by Camille Lewis of Hand in Hand Trust Co., the largest corporate trust company.
Presentations addressed the requirements of registration and the statutory roles of the trust manager; trustee; auditor and the actuary; the trust laws and their relation to pensions; pension fund management and investments. Also the requirements in the event of switching, transfer or winding up of pension plans were discussed