Other Sections

Supervision

The Registrar conducts ongoing supervision of the pension sector to protect the long-term interest of pension members and integrity of the pension system. Pension funds are expected to operate in a safe and sound manner while also being fair, efficient and transparent, and able to reduce systemic risks. The Registrar monitors the risk profile of pension funds as well as operational and compliance aspects of licensed and registered pension entities to identify areas of elevated risk, non-compliance, and adequacy of mitigating measures. Appropriate enforcement action is taken in the event of non-compliance and other adverse developments.

The supervisory approach for pension entities is a combination of compliance based and risk based, conducted through off-site surveillance and on-site examinations. Statutory returns, submitted quarterly through Bank Supervision Application (BSA) facilitate off-site surveillance, while on-site examinations of pension entities are carried out periodically in line with on-site examination plans. The Registrar, as a member of International Organization of Pension Supervisors (IOPS), aspires to comply with the regulatory standards and best practices set by the IOPS.

Off-site surveillance of pension entities involves::

  1. quarterly review and analysis of statutory returns to evaluate financial condition and performance of pension funds.
  2. quarterly review and analysis of statutory returns to evaluate compliance with requirements by pension services companies.
  3. market intelligence on developments in the pension sector as and when events occur.

In addition, the Registrar also enforces compliance with the Pension Act by employers through employer inspections held jointly with the Ministry of Labour periodically. Furthermore, the Registrar provides alternative redress mechanism for complaints on pension received on an ad hoc basis through the complaints handling portal, telephone calls, emails, letters and walk in customers.

On-site examination

Prudential or market conduct on-site examination of pension entities involves::

  1. assessing the level of risks inherent to pension entities ;
  2. evaluating effectiveness of risk management system and internal controls in identification, measurement, monitoring, and controlling of risks inherent to pension entities;
  3. determination of residual risks faced by pension entities; and
  4. assessing pension entities’ compliance with financial service laws.

Types of on-site examinations include::

  1. routine examination: carried out for every licensee or registrant as per examination planning cycle which may be full scope - covering all risk areas of supervisory importance, or targeted on specific areas;
  2. ad hoc: triggered by an adverse event within the institution or market; or
  3. follow up: conducted to ascertain implementation of recommendations from a routine or ad hoc on-site examination.