Administrators of pension plans have been warned that they face possible imprisonment if they fail to register their plans with the Financial Services Commission (FSC) by next year’s deadline.
The regulatory body announced today that one in four pension plans had yet to complete their registration with the FSC, which has been in existence since 2011.
The FSC said the delinquent companies now had until 2017 to complete their registration, after which they would like face legal action. It also warned that the legislation which established the agency provided for penalties ranging from a fine to conviction.
FSC Chairman Sir Frank Alleyne said some companies that had been in operation for more than three decades were being asked to provide “full information” accounting for every year of the pension plan.
He explained that they were now having difficulty coming up with the information because, in the past, there were no legal requirements that held them accountable.
“It is like you are kind of already operating in the dark, but if they were held to account they would not have that difficulty. But they took the money [and] since there was no legal requirement to account for it in a way which is transparent that is a difficulty now trying to go back and get their auditors and accountants to sort out things for them.
“The problem with pension plans, if you don’t regulate them carefully [contributors could lose their pensions] . . . . That is why we need to have every pension plan registered. It is five years since we have started and there are still about 76 or so pension plans [out of 300] which are not registered yet and we have to continue to ask the Minister [of Finance] to extend the period in which they can register. And the real problem is that this is the first time they are being held accountable,” he said.
“There is no if or maybe about it. The commission will continue to work to have those plans registered and those who refuse to register they will meet the CEO in the court,” said Sir Frank.
The FSC Chairman also sent a strong warning to independent insurance brokers, underwriters and sales representatives in the financial services sector to ensure they were registered with the FSC and were adhering to the requisite laws.
Meanwile, a stern warning has been issued to companies and individuals involved in the financial services sector that they would not be allowed to get away with non-compliance with the regulatory requirements.
The FSC said while it was willing to work with companies that were experiencing difficulties to help them improve, it would not be afraid to take action against any entity found in breach of the laws.
Sir Frank told journalists at a new conference today that over the past five year the FSC had closed one insurance entity and suspended four credit unions for non-compliance.
“We not only monitor, we make clear recommendation on what has to be done,” Sir Frank said, explaining that if the recommendations were not implemented within an agreed timeframe, Chief Executive Officer Randy Graham would take action.
“If the investigation says you have to prosecute somebody he will do it. He doesn’t have to get the board’s permission. He can tell us.
“So let there be no doubt those persons who sit on committees and boards in credit unions this commission is going to insist that they take their fiduciary responsibilities seriously . . . and there is no friend in it. We are not dealing with friends. We have to hold the law and we have to maintain and build public confidence in the institutions which we regulate. I want to make this very clear,” Sir Frank reiterated.
The news conference was held to announce developments within the FSC since its inception on April 1, 2011.